Financial Results FIN/571 July 22‚ 2013 Interpreting Financial Results Liquidity: Current Ratio Parrino‚ Kidwell‚ & Bates (2012) detail the current ratio as current assets divided by liabilities. The current ratio identifies a firm’s potential to pay short-term liabilities; higher liquidity is a good sign for potential creditors (Parrino et al.‚ 2012). At the same time‚ however‚ the current ratio should not greatly exceed benchmarks of other competitors (Parrino et al.‚ 2012). This could be
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Ratio Analysis Name: Agbasimelo E. Ifeanyi Roll no: @00316215 Instructed by: David Wright PART A PAGE 1.1 Sales turnover index 4 1.2 Gross profit margin 4 1.3 Net profit margin 5 1.4 Return on capital employed 5 1.5 Current ratio 6 1.6 Acid test ratio 7 1.7 Interest cover ratio
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RATIO ANALYSIS Ratio analysis is a key dimension of financial management‚ suggesting a relationship between profit and loss as mentioned in the balance sheet of an organization. In Latin ‘ratio’ means reason. In English ‘ratio’ means relationship. Ratio analysis is defined as “the establishment of a reasoned relationship” of a fixed variable character between measurements of certain phenomenon having some kind of linkage. A ratio shows the arithmetical relationship between two figures
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FINANCIAL RATIOS LIQUIDITY RATIOS Current Ratio: = current assets / current liabilities ▪ The higher the ratio‚ the greater the "cushion" between current obligations and a firm ’s ability to meet them. ▪ Use: An indication of a company ’s ability to meet short-term debt obligations; the higher the ratio‚ the more liquid the company is. Current ratio is equal to current assets divided by current liabilities. If the current assets of a company are more than twice the current liabilities
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you find a combination of numbers that is more significant than this one. This ratio is known as the Golden Number‚ or the Golden Ratio. This mystery number has been used throughout different aspects of life‚ such as art‚ architecture‚ and of course‚ mathematics. One may wonder where the Golden Ratio came from? Who thought to discover it? When was it discovered? And how has it been used throughout time? The Golden ratio has been used throughout different aspects of life after being discovered during
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1) Current Ratio The ratio is mainly used to give an idea of the company’s ability to pay back its short-term liabilities (debt and payables) with its short-term assets (cash‚ inventory‚ receivables). The higher the current ratio‚ the more capable the company is of paying its obligations. 2) Quick Ratio An indicator of a company’s short-term liquidity. The quick ratio measures a company’s ability to meet its short-term obligations with its most liquid assets. For this reason‚ the ratio excludes inventories
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Financial ratio analysis A reading prepared by Pamela Peterson Drake OUTLINE 1. 2. 3. 4. 5. 1. Introduction Liquidity ratios Profitability ratios and activity ratios Financial leverage ratios Shareholder ratios Introduction As a manager‚ you may want to reward employees based on their performance. How do you know how well they have done? How can you determine what departments or divisions have performed well? As a lender‚ how do decide the borrower will be able to pay back as promised? As a
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4 Chapter 1. Introduction 5 1.1 Theoretical background 8 1.1.1 Use and significance of Ratio Analysis 8 1.1.2 Limitations 11 1.1.3 Classifications of ratios 13 1.2 Research Methodology 33 1.2.1 Need for the study 33 1.2.2 Scope of the study 33 1.2.3 Objectives of the
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International Accounting 1. What industry is Disney in ? 2. Does Disney make money ? (IS) 3. Trend of 3 years 4. Makes Money ? YES : How much ? (IS) – Gross Margin and Net Income Margin – Ratio Analysis 5. Liquidity (Cashflow/BS) 6. How is Disney doing compare to competitors ? 7. ROE and ROA (IS/BS) 8. Future Prospects 9. Pricing Strategy 10. Marketing Strategy I. Return on Investment Return on Equity (ROE):
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Current Ratio: The current ratio gauges how capable a business is in paying current liabilities by using current assets only. Current ratio is also called the working capital ratio. A general rule of thumb for the current ratio is 2 to 1. However‚ an industry average may be a better standard than this rule of thumb. So‚ according to the information that we got‚ in 2007 Beximco Pharmaceutical’s current ratio was 1.80 which declined to 1.10 in 2008 and ultimately in 2009 it boosted up to 2.97‚ that
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