...Finanical Analysis Dynashears Case II Anne Putnam 1 Case Study of the Risk Management Memorandum of Dynashears INC: Liquidity In analyzing liquidity of the company, the current ratio is not very telling of a falling company. The company increased its ratio throughout the period of the income statement thus building upon its company assets and allowing for a 6-1 ratio of assets over its liabilities. This implies the company is still able to operate sufficiently even though it did not make its optimum current ratio of about 8-1. However, when one takes the inventory out of the equation with the quick ratio, the numbers show the true strength of short term liquidity. The numbers are still good, and do not indicate failure – but are nowhere near the projected ratio due to the overstock of inventory. The current assets of the company in comparison to the total assets stayed the same, maintaining around 25%. Long Term Debt paying ability The amount of assets for the company that are financed by the debt remains around 35%, which is still a little higher than the expected number, but the company has progressed to lower their asset financing. The same goes for their long term debt, they remain about 30% of the company’s capital financing is with debt, which is not a large number giving the company pretty good leverage. I would not consider the firm one of great risk from these numbers. The total debt to equity is relatively normal for this type of company. The biggest differences...
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