Nestle financial analysis

1. Current Ratio = Current Assets / Current Liabilities
Edison = 12,800 / 3,600 = 3.56
Stagg = 13,800 / 3,600 = 3.83
Thornton = 13,800 / 3,600 = 3.83

Quick Ratio = Quick Assets / Current Liabilities
Edison = 11,000 / 3,600 = 3.05:1
Stagg = 10,000 / 3,600 = 2.78:1
Thornton = 9,000 / 3,600 = 2.5:1

The Current ratios of Stagg and Thornton is bigger than Edison. So, these two are better in liquidity than Edison.
Far as the quick ratio, Edison is the top of the list, having the top quick ratio of 3.05:1. Stagg is on second place having quick ratio of 2.78:1, which is better than Thornton.
Therefore, the liquidity of Edison will be rated as the best.

2. Accounts receivable turnover ratio
= Net sales / Average Accounts receivable
= 832,000 / [(205,000 + 156,000) / 2]
= 832,000 / 180,500
= 4.61 Inventory turnover ratio = Cost of goods sold / Average Inventory = 530,000 / [(70,000 + 50,000) / 2] = 530,000 / 60,000 = 8.83
3. Profit Margins on Sale = Net Income / Net Sales
= 130,000 / 1,750,000
= 7.43% Rate of Return on Assets = Net Income / Average Assets = 130,000 / 1,200,000 = 10.83%

Return on Common stockholder’s equity = Net Income / Average common stockholder’s equity = 130,000 / 500,000 = 26%

The firm’s total assets equal $1,200,000, but the common stockholder’s equity is only $500,000. It indicates that balance $700,000 are liabilities or debt.
The company has an interest expense of $120,000 and it shows that there is an enormous debt that the company tallied up.
The good that comes out of this is that the company is able to arrange the debt, but the bad point is that the company is deeply indebted. They