proceeds. Solvency Ratios Solvency ratio is the process of analyzing the company’s capacity to pay its obligations while keeping the business going (Martin‚ 2009). Total assets are measured in terms of percentage against total liabilities: Solvency = Total Assets/Total Liabilities The ratio of at least 1.0 or greater shows a good financial standing and long range financial solvency. During 2007‚ Tootsie Roll’s total assets were $812‚725 against total liabilities of $174‚495 or a solvency ratio of
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Indigo Books & Music‚ Inc. ABSTRACT The purpose of this report is to make a recommendation on a long-term investment of Indigo Books & Music‚ Inc. by looking at its financial health from annual reports and recent news reports. The six ratios considered are current ratio‚ quick ratio‚ profit margin‚ operating ratio‚ debt-equity ratio‚ and debt-asset ratio. These ratios were compared over time‚ against its close competitors‚ which are Amazon.com Inc. and Wal-Mart Stores Inc.‚ and against
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Case：Sears‚ Roebuck and Co. vs. Wal-Mart Stores‚ Inc. Financial Statement Case analysis 1． How do the retailing strategies of Sears and Wal-Mart differ? How does each firm operate their business/attempt to create value? The two companies differs in retailing strategy in two ways. 1. Credit sales boost sales greatly in Sears‚ not in Wal-mart Since 1992 when Arthur C. Martinez was brought on board to head Sears’s retailing operations‚ credit sales‚ especially through the use of the
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Based on the profitability of Nike and Under Armour‚ I believe that NIKE is more efficient in generating profit than Under Armour because of these reasons: First‚ based on the net profit margin‚ Nike is 10.70 percent compared to Under Armour which is 6.75 percent. Nike has a higher net profit margin than Under Armour. However‚ Under Armour had more of a gross profit margin than Nike. Second‚ Nike has a higher fixed asset turnover ratio‚ which means that they can generate revenue more effectively
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used: 1. Liquidity ratios 2. Capital Structure and Solvency 3. Return On Investment 4. Operating Performance 5. Asset Utilization 6. Market Measures The ratios measure the short term ability of the company to pay its current short-term liabilities. 1. Liquidity Ratio Liquidity ratios provide information about a firm’s ability to meet its short-term financial obligations. They are of particular interest to those extending short-term credit to the firm. Two frequently-used liquidity ratios
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money would be minimized. I will evaluate their financial situations through some crucial parameters‚ as follows: Liquidity Ratios Parameters R. Corp. T. INC. Current Ratio 1.62:1 0.86:1 Receivable Turnover 8.82 (times) 115 (times) Average Collection Period 42 (days) 3 (days) Inventory Turnover 6.87 (times) 8.26 (times) Days In Inventory 53 (days) 44 (days) Liquidity ratios indicate the short-term ability of a company to pay its obligations. As we computed above‚ the current ratio
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Analysis A. Horizontal Analysis 1. Statement of Financial Position 2. Statement of Comprehensive Income B. Vertical Analysis 1. Statement of Financial Position 2. Statement of Comprehensive Income C. Ratio Analysis 1. Test of Liquidity 2. Test of Solvency 3. Test of Profitability V.
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analysis | b. | solvency analysis | c. | profitability analysis | d. | horizontal analysis D | 2. Which of the following below generally is the most useful in analyzing companies of different sizes a. | comparative statements | b. | common-sized financial statements | c. | price-level accounting | d. | audit report | B 3. The percent of fixed assets to total assets is an example of a. | vertical analysis | b. | solvency analysis | c. |
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greatest impact on the profitability of Transport Solutions. Be sure to justify the choice of this area. You should write no more than 700 words. Submit your answer as a pdf file and note the word count at the bottom of the page. From the numbers we computed‚ Transport Solutions could roughly see how well each business is doing just by looking at the ratios. The ratios are separated into six categories‚ with each category showing a different measure. These categories are liquidity measures‚ long-term
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as for decision-making both operational and strategic‚ * Business environment‚ which is linked with the economic and capital transactions. Accounting allows for clear and reliable picture of the economic reality of the company‚ its profitability‚ liquidity and the economy. The records kept by the accounting are also important information for owners of business entities in the maintenance of the property. In addition‚ financial statements and reports prepared on the basis of the accounts are
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