Ratio Analysis
Memo
To: Kristen Huffman, President and CEO
From: Maisha Morris, William Jefferson, Rebecca Reyes, George Taylor and Jason Thorn
Date: September 25, 2012
Re: Huffman Trucking Ratio Analysis
Team B has completed a ratio analysis on Huffman Trucking. Our team has looked over financial statements to determine the liquidity, profitability, and solvency ratios of Huffman Trucking. These ratios provide detailed information to creditors, investors, and employees. Together, the ratios reveal data related to the performance and position of Huffman Trucking.
What do the liquidity, profitability, and solvency ratios reveal about the company’s financial position? *
The liquidity ratio of a company shows the way the company is able to pay back short-term debt that is owed. Creditors would be interested in this type of ratio. The profitability ratios are the profit performance that makes up the financial success of the company. Profitability ratios would be beneficial to individuals outside of the company such as investors and creditors. Solvency ratios are the ability of the company to pay off the long-term debt. The company’s solvency ratios are of interest to long-term creditors and the company’s’ shareholders. Shareholders and long-term creditors would be most interested in solvency ratios of the company. *
Which users may be interested in each type of ratio? Huffman Trucking are mainly suppliers, other trader creditors and staff such as: Government – profitability ratio.
Suppliers - they are interested in liuidity.
Electronics cunsumers – expendigture on anti-pollution measures.
Lenders – grearing ratios.
Manageres and Cutomers- Profitabilty.
Employees – Mainly in return on Capital Employed ratio. * * What does the collected data reveal about the company’s performance and position? The collected data reveals that Huffman Trucking has experienced tremendous growth over the past few years. The growth is in result of having long-term
To: Kristen Huffman, President and CEO
From: Maisha Morris, William Jefferson, Rebecca Reyes, George Taylor and Jason Thorn
Date: September 25, 2012
Re: Huffman Trucking Ratio Analysis
Team B has completed a ratio analysis on Huffman Trucking. Our team has looked over financial statements to determine the liquidity, profitability, and solvency ratios of Huffman Trucking. These ratios provide detailed information to creditors, investors, and employees. Together, the ratios reveal data related to the performance and position of Huffman Trucking.
What do the liquidity, profitability, and solvency ratios reveal about the company’s financial position? *
The liquidity ratio of a company shows the way the company is able to pay back short-term debt that is owed. Creditors would be interested in this type of ratio. The profitability ratios are the profit performance that makes up the financial success of the company. Profitability ratios would be beneficial to individuals outside of the company such as investors and creditors. Solvency ratios are the ability of the company to pay off the long-term debt. The company’s solvency ratios are of interest to long-term creditors and the company’s’ shareholders. Shareholders and long-term creditors would be most interested in solvency ratios of the company. *
Which users may be interested in each type of ratio? Huffman Trucking are mainly suppliers, other trader creditors and staff such as: Government – profitability ratio.
Suppliers - they are interested in liuidity.
Electronics cunsumers – expendigture on anti-pollution measures.
Lenders – grearing ratios.
Manageres and Cutomers- Profitabilty.
Employees – Mainly in return on Capital Employed ratio. * * What does the collected data reveal about the company’s performance and position? The collected data reveals that Huffman Trucking has experienced tremendous growth over the past few years. The growth is in result of having long-term