Analysis Swot Tows and Financial Herman Miller
Financial Ratios and Analysis of Herman Miller
Liquidity Ratios Liquidity ratios for a company help whomever is analyzing the data determine the company’s liquidity. When a company has good liquidity they are able to pay off their short term debt without having to take out any additional financing. We will look at Herman Miller’s current ratio for 2009 and 2010. The current ratio is calculated by taking the company’s current assets and dividing it by the current liabilities. It shows how many times the current assets can cover the current liabilities. 2009 current ratio | 2010 current ratio | 450.9/282.2= 1.597 | 394.7/313= 1.261 |
Herman miller’s current ratio in 2009 of 1.597 shows they have approximately $1.60 of current assets to ever $1.00 in current liabilities. In 2010 they had $1.26 of current assets to ever $1.00 of current liabilities. This is a bit of a drop from 2009 to 2010. With the ideal point for the current ratio being above 1.0; Herman Miller can cover their short term debt without any financing but, the ratio is still mediocre.
Debt Management Ratios Debt management ratios show to what extent a company uses borrowed funds to finance its operations. These ratios are important to a company because creditors use them to determine the riskiness of the company’s financial position. Using the debt ratio we can determine how much of Herman Miller’s assets are provided through debt. The debt ratio is found by taking the company’s total debt and dividing it by the total assets of the company. Here is the debt ratio for 2009 and 2010 Debt Ratio 2009 | Debt Ratio 2010 | 759.3/767.3= .99 | 690.5/770.6= .896 |
From the debt ratio we can tell that Herman Miller has nearly as much debt as assets in 2009. This could shy away some creditors. In 2010 they improved by about 10% which really helps their potential ability to gain more financing from creditors. With ideal ratio being below 1 Herman Miller is ok here but far from good.
Profitability
Liquidity Ratios Liquidity ratios for a company help whomever is analyzing the data determine the company’s liquidity. When a company has good liquidity they are able to pay off their short term debt without having to take out any additional financing. We will look at Herman Miller’s current ratio for 2009 and 2010. The current ratio is calculated by taking the company’s current assets and dividing it by the current liabilities. It shows how many times the current assets can cover the current liabilities. 2009 current ratio | 2010 current ratio | 450.9/282.2= 1.597 | 394.7/313= 1.261 |
Herman miller’s current ratio in 2009 of 1.597 shows they have approximately $1.60 of current assets to ever $1.00 in current liabilities. In 2010 they had $1.26 of current assets to ever $1.00 of current liabilities. This is a bit of a drop from 2009 to 2010. With the ideal point for the current ratio being above 1.0; Herman Miller can cover their short term debt without any financing but, the ratio is still mediocre.
Debt Management Ratios Debt management ratios show to what extent a company uses borrowed funds to finance its operations. These ratios are important to a company because creditors use them to determine the riskiness of the company’s financial position. Using the debt ratio we can determine how much of Herman Miller’s assets are provided through debt. The debt ratio is found by taking the company’s total debt and dividing it by the total assets of the company. Here is the debt ratio for 2009 and 2010 Debt Ratio 2009 | Debt Ratio 2010 | 759.3/767.3= .99 | 690.5/770.6= .896 |
From the debt ratio we can tell that Herman Miller has nearly as much debt as assets in 2009. This could shy away some creditors. In 2010 they improved by about 10% which really helps their potential ability to gain more financing from creditors. With ideal ratio being below 1 Herman Miller is ok here but far from good.
Profitability