profit per revenue is low. 2. Commercial bank has an extremely high accounts receivable and the longest receivables collection period. And their biggest part of liabilities is notes payable. It really meets the features of Commercial bank. 3 Computer software developer sells most of their products online and direct to customers‚ so most of their sales and transaction online. This explains the high receivable collection period because most of their transactions can be bought with their own
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We were able to distinguish the Service oriented companies by looking at their Inventories. Being those kinds of companies they showed zero inventories and “not applicable” (NA) inventory turnover. The first service-oriented company was E‚ the advertising agency. We were able to see that the accounts receivable and the accounts payable were almost equal. Which reflects how advertising agencies do business and what Lamar Advertising & Co (LAMR) had. Advertising agencies are usually paid for
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would be Airline because it would not use the inventory for its products. Therefore E‚ G‚ M and N should be the four firms. Then I determined each firm from each characteristic. N has clearly different numbers from others in high accounts receivable and note payable. From balance sheets of commercial banks at net searching are specified by their high long term investments. It is a ground that N should be a commercial bank even though I could not find note payable in their financial data.
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To: Company G CEO Date: February 20‚ 2013 Re: Comparing Company G against industry average The first ratio calculated was current ratio. This is done by dividing current liabilities by current assets. Current ratio is important because it shows the business’s ability to pay back the current liabilities with the current assets that they have available to them. At the end of 2011‚ the current ratio was at 1.86. In 2012‚ this ratio dropped to 1.80. The industry ranges from 3.1 (showing a strong
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ability to pay short-term obligations. Current assets/Current liabilities 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. A ratio under 1 suggests that the company would be unable to pay off its obligations if they came due at that point. While this shows the company is not in
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The Role of Financial Ratios Table of content Introduction 3 Chapter 1. Notion and types of ratios. 4 1.1 Liquidity ratios. 5 1.2 Financial leverage ratios 7 1.3 Funds management ratios 9 1.4 Profitability ratios 12 Chapter 2. Use of financial ratios. 15 2.1Use and Limitations of Financial Ratios 15 2.2 Used financial data 15 2.3 Financial ratios calculated for The Apple Company 16 2.4 The Dupont Model 18 Appendix 1 21 Conclusion 23 Bibliography 24 Introduction I have chosen
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be doing a poor job of investing it. Tootsie’s inventory turnover ratio is higher than Hershey’s. This means that Tootsie sells its inventory faster than Hershey. Hershey has higher days in inventory index which means that Hershey is not selling its total inventory as quickly as Tootsie. It could be a sign that Hershey can become less profitable. Tootsie’s RTR is 14.61 and this indicates that on average the company’s accounts receivables turned over 14.5 times during the year 2007. Hershey’s RTR
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Company and for PepsiCo‚ Inc.‚ are presented here (in millions).Coca-Cola PepsiCoTotal current assets $ 12‚094 $ 8‚639Total current liabilities 10‚971 6‚752Net sales 21‚962 29‚261Cost of goods sold 7‚638 13‚406Net income 4‚847 4‚212Average (net) receivables for the year 2‚131 2‚915Average inventories for the year 1‚336 1‚477Average total assets 29‚335 26‚657Average common stockholders’ equity 15‚013 12‚734Average current liabilities 9‚429 6‚584Average total liabilities 14‚322 27‚917Total assets 31
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that companies with a quick ratio over one are sufficiently able to to meet their short-term liabilities. This low quick ratio suggests that AT&T may be over-leveraged‚ struggling to maintain or grow sales‚ paying bills too quickly‚ or collecting receivables too slowly. • There were slight decreases in working capital per share between 2005 and 2007‚ from -2.8 to -2.4. It then plummeted to -3.35 in 2009; and‚ lastly‚ ended 2010 at -2.37. This ratio indicates that the company is not likely to be able
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strong ability to cover liabilities 2.1median to 1.4 stating an weakness. 2. “Acid Test Ratio†shows us whether the entity could pay all its current liabilities if they came due immediately. It’s calculated by the available cash plus accounts receivable plus short–term investments divided by current liabilities. In 2011‚ the acid test ratio was 0.64. By 2012‚ it decreased to 0.43. Even though the acid-test ratio is less than 1 which rates in the lower third quartile in the industry of 1.6‚ 0
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