Ethan Stanchik Finical Management Professor 08/11/2017 Financial Statement Analysis paper To find the current ratio of the company you take current assets divided by current liabilities. 2,680,112/1,039,800 = 2.6. This ratio shows us how well the company’s ability to pay back its liabilities, which are debt and accounts payable, and how well they can pay it back with their assets. Assets are cash, marketable securities, inventory and accounts receivable. This ratio gives a broad idea of the company’s financial health, which in this case is .10 below the average. Although this is a low ratio, it is ok because you at least want your ratio to be at over 2. A smaller current ratio tells us that a firm may have a hard time paying their current liabilities in the short term. With a low ratio, this means that even if your company liquidates all of its current assets, it still wouldn’t be able to cover its current liabilities. A higher ratio like our current ratio means we have less chance of a cash squeeze. In finding the quick ratio you take current assets minus inventories, then divide it by the current liabilities. (2,680,112-1,716,480) / 1,309,800 = .93. This ratio compares the cash, short-term marketable …show more content…
This may be one of the worst ratios for this company. Days sales outstanding tells us the average number of days that company takes to collect revenue after a sale has been made. Due to the high importance of cash in a running business, it’s always in the best interest of the company to receive outstanding receivables, because money that a company spends time waiting to receive is money lost. That money could be reinvested, thereby generating more sales. By this ratio being so high means they aren’t getting the money in time and cannot reinvest the money. This is just dead money which is hurting the company’s
In this case, we can say that Amazon performance is a lot better than CanGo. A high Debt to Equity Ratio generally means that a company has been aggressive in financing its growth with debt. Debt can come in the form of stocks, bonds, and loans that the company borrowed against. Amazon current ratio is 1.31, but CanGo current ratio is 5.33. In general we can see that CanGo is performing better in this area compared with their main competitor Amazon, because this ratio shows that CanGo is capable of repaying its debts and liabilities than
The state of Indiana is a mid-western state governed by Mike Pence in 2016, and its financial statements were prepared by Auditor of State Suzanne Crouch and her team (1). Its 2016 Comprehensive Annual Financial Report communicates to readers that: Indiana’s post-retirement health care plan is underfunded and has a funding gap, its infrastructure is sufficiently maintained, its deficit is concerning, it has increase state-funded medical care, and its unemployment is decreasing. Ohio is an appropriate benchmark and comparison for Indiana’s financial performance. 1. The first insight readers gain by analyzing Indiana’s financial statements is that there is a financial gap between the funding for its other post-employment benefits, primarily its
Their current ratio improved from 1.59 to 2.44 which shows the ability to cover current liabilities has improved. Massachusetts Stove Company strategically made decisions to not only increase their current assets quickly but also managed their liabilities to keep them from growing out of control. This means that the company could cover current liabilities at any time relatively easily with their cash, receivables, or other current assets. In terms of the market, Massachusetts Stove Company does have the demand of 220,000 active prospects they could try to sell stoves too if a dire need arose for quick cash. Management even brought their quick ratio to 1.08.
The inventory was sold and replaced 5.49 times in the year of 2013. This ratio is high. This means that the demand for the Dollarama’s products is high. This indicates that Dollarama Inc.’s performance in the fiscal year of 2013 is high. 5) Discuss the debt to equity ratio and what it says about how Dollarama finances its operations?
Lockheed Martins is a multi-billion dollar company and its financials are extremely complex. The following is a high-level overview of the corporation’s financial situation. The overview includes the identification of the organization’s primary financial resources (sales, investments, and credit), a review of the management of its financial resources, summary of its financial performance, a description of how to obtain financial information, and a brief analyze and recommendation for future financial growth.
With a review of the ASX200 annual financial reports, KPMG found out that some organisations have started to use graphical communication to deliver key information to the investors (KPMG, 2015). Graphs has been considered as an effective and efficient vehicle in presenting quantitative data in financial reporting (Hill & Milner, 2003). However, this paper will critically examine the use of graphs in financial reporting as there are more factors that need to be taken into account. Graphical representation brings many benefits to the companies’ financial disclosures. First of all, learning and cognitive processing are facilitated in the information exchange.
This means that every dollar of current liabilities is backed by just over $2.50 worth of current assets, which is a positive for any business. Gemini’s Quick Ratio has barely changed
It does this by comparing the company's total debt (including short term and long term obligations) and dividing it by the amount of owner's equity .For now; you only need to know that the number can be found at the bottom of the balance sheet. Actually calculate the debt to equity ratio in segment two when we look at real balance sheets.) Debt Equity Ratio YEAR Total Liabilities Shareholders’ Equity Debt equity Ratio 2013-14 6,569,079 5,743,769 1.14 2012-13 5,405,029
Their current ratio is 1.4% (total current assets/total current liabilities). According to the Risk Management Association of Financial Ratio Benchmarks, the current average ratio is 1.5%. In 2014, the current ratio for the firm was 1.46% while the average ratio in the industry (NAICS 311330) was 1.6%. The company’s net property and equipment in 2015 is worth 2.6 million dollars, a slight increase from 2014, which was 2.3 million. The company is considering taking on some debt to increase their production capabilities.
Understand the Income Statement The Income Statement is one of the financial reports that you should be receiving from your accountant regularly. At least once a month, you should be able to see how your operations are doing. You will be able to react in a timely manner if you can see how your business fares in the market.
Companies are like spouses. If you find a good one, it is an investment, but if you find a bad one, it becomes a long-term bill. Although the analogy is funny, there is truth behind it. When an individual selects a spouse, they usually take the time to gain significant information about them before making a long-term commitment. Investing in a company is no different.
The three basic financial statements are: 1- income statement: a report that presents how much revenue, the costs, and expenses connected with earning that revenue earned over a specific a period. This explains how much the company earned or lost over the period. 2- The balance sheet: a report shows the assets, liabilities, and value of the entity as of the reporting date.
Per this week’s materials regarding investment opportunities, there are numerous informational aspects that can guide potential investors into selecting the right investment. “What are the corporate assets? Where does the company operate? What are the key products? How much income is being generated?
Equity (£ M) =1,303.4 Debt-to-Equity Ratio (D/E) = Debt / Shareholders Equity = Debt /( T.A – T.L ) 706.4/( 2,009.4-706.4) 706.4/1,303.4 Thus the Debt-to-Equity Ratio is 0.54, which translates to 54% 2012 Total Assets (£ M) = 2,258.4 Total Liabilities (£ M) = 781.1 Equity (£ M) =1,477.3 Debt-to-Equity Ratio (D/E) =
The current ratio of the Ajinomoto Berhad is stable. It is because the high current ratio shows that there are many cash in the company. They have extra money to utilize in the other area. Besides, the quick ratio of the Ajinomoto Berhad is higher and it is good for the investor to invest. It means that the company has the ability to cover the current liabilities.