...+ 295,000 = $595,000/2 = $297,500 $70,350/$297,500 = 23.65% c. Return on common stockholders equity $180,000 + $165,000 = $345,000 $345,000/2 = $172,500 $60,000/$172,500 = 34.78% d. Debt-equity ratio (12/31/08) $120,000/$180,000 = .67 e. Current ratio (12/31/08) $100,000/$105,000 = .95 f. Quick (acid-test) ratio (12/31/08) $27,000 + 36,000 = $63,000/$105,000 = .6 g. Accounts receivable turnover ratio (Assume that all sales are on credit) $36,000 + $37,000 = $73,000/2 = $36,500 $600,000/$36,500 = 15.4 h. Number of days sales in receivables 360/16.4 = 22 i. Inventory turnover ratio (Assure that all purchases are on credit) $35,000 + $42,000 = $77,000/2 = $38,500 $405,000/$38,500 = 10.52 j. Number of days sales in inventory 360/10.52 = 34 k. Number of days in cash operating cycle $405,000 + $35,000 - $42,000 = $398,000 $80,000 + 68,000 = $148,000/2 = $74,000 $398,000/$74,000 = 5.4 2. Overall financial health of SST Enterprises The smaller quick ratio is a problem for excess inventory. Inventory turnover is not a problem but compare it with the prior years. Payables time id longer than average and poses negative in operating cycle, no extra cash for financing. Need to know about the long term plans to evaluate the company’s financial...
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...Butler Lumber Case Study I. Statement of Financial Problem Butler Lumber Company, a growing profitable business has exhausted its credit limit and the key issues facing it are: 1. Need for additional funds to continue the growth 2. Need to consolidate debt 3. Need to improve cash flexibility. In this case study I will be discussing following problem: Why has Butler Lumber been profitable in the increasing volume of sales but at the same time it is experiencing cash difficulties in 1988 – 1990? This is a historical problem and my calculations and assumptions are based on income statement and balance sheet for 1988 – 1990. II. General Framework for Financial Analyses There are different financial ratios and questions they answer: • Liquidity ratio – current ratio: Will Butler Lumber be able to pay off his debts as they come due? Satisfactory liquidity ratio is necessary if Butler Lumber is to continue its operations. • Asset management ratio: Does Butler Lumber have the appropriate amount of assets versus sales? How effectively is Butler Lumber managing its assets? • Debt management ration: Does Butler Lumber have the right mix of debt and equity? • Profitability Ratios: Are sales high enough? Do sales exceed the unit cost? It is necessary to calculate different types of financial ratios to examine different aspects of Butler Lumber’s operations. Key accounts for sources of funds for Butler...
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...The greatest environmental threats for A&F Abercrombie & Fitch has been known for not being very diverse. They were striving for a certain look and style. There clothes mainly consisted of young white male and females with nice bodies, beautiful hair and shapes that fit their tiny clothes. Entering in A&F store, as you look on the walls, you would notice that the models all have the same look. A&F was known for hiring associates that also fit that look. A&F was also known for not hiring minorities and if they were hired it would be for stocking or closing up store. A&F was known for this practice and really didn’t mind the lost of not having the minority business, which prompt lawsuits to the company and drew attention to them, but this did not stop A&F. A&F also prevented to the sales of potential clients by racial profiling with the expensive of clothing. The greatest opportunities available in the marketplace for A&F to pursue A&F specializes in casual wear in marketing the younger generation in buying their products. They should pursue the older generation in finding out exactly what they are looking for and try to meet that need. The company could be more tolerant to the older generation. A&F will understand the need of the younger generation but to get an handle on the need of the older generation from the ages of 35-50 are not old but to maintain the in style look for that generation. Hitt,Ireland, Hoskisson states: Demographics...
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...a.) Ratios are useful indicators of a firm's performance and financial situation. Most ratios can be calculated from information provided by the financial statements. Financial ratios can be used to analyze trends and to compare the firm's financials to those of other firms in the same industry. Managers use ratio analysis to identify situations needing attention; potential leaders use financial analysis to determine whether a company is creditworthy; and stockholders use ratio analysis to help predict future earnings, dividends, and free cash flow. b.) The 2011 current ratio is calculated by using the following formula: current assets/current liabilities= 2,680,112/1,039,800= 2.58:1 The 2011 quick ratio is calculated by using the following formula: current assets-inventories/current liabilities=2,680,112-1,716,480/1,039,800=.93:1 The higher the current ratio the better the company’s liquidity because it provides insight about a firm's ability to meet its short-term financial obligations; therefore after calculating the 2009, 2010, and projected 2011 current ratio using the current assets/current liabilities formula we find the following ratios: 2009: 1,124,000/481,600=2.33:1 2010: 1,946,802/1,328,960=1.46:1 projected 2011: 2,680,112/1,039,800=2.58:1 The projected 2011 balance sheet leads us to believe that the year 2011 will have more liquidity than in the previous 2 years. Ratios are very useful to managers, bankers and stockholders for various reasons...
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...Business Analysis: Haefren Baum “Show Me The Money” Christy Lopez Johnathan Putmon Harikrishna Patel Nikhil Dargani Darrell Springer Rayhaan Malik Financial Analysis and Introduction to Loan Structuring Professor Hadiye Aslan February 16, 2016 Name of the Business Haefren Baun Nature of the Business Haefren Baun is a retailer of furniture located in Germany. They have been purchasing furniture from the furniture manufacturing company, Wiegandt, which manufactures high-quality furniture. The retailer was once a partnership that was established in 1965, but later became incorporated in 1970. They have been purchasing furniture from Wiegandt since 1968. The company began operations in downtown Cologne but later expanded to three additional outlets in Rhineland. Marketing Analysis Haefren Baun’s product is high-quality furniture, where the company is focused on the German market. Business was booming until 1993, which then turned to a bust due to consumer confidence slipping. This leads to a decrease in demand for furniture, causing the demand cycle to experience a downward trend. The decrease in demand can be derived from the fact that the economy had declined by 1.2%. By the end of 1993, the sales figures were DM 18,647. The sales had decreased by approximately 19% from 1993 to 1994. Sales were on a steep decline and to entice customers, Haefren Baun had to lower their prices on the furniture. The reasoning behind this was also to maintain the sales volume. In...
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...ACCT 313 Intermediate Accounting I Financial Statement Application #2 Inventories The purpose of this assignment is to help you understand how the inventories concepts discussed in Chapters 8 and 9 of the textbook apply in a real-world company. To complete this assignment, you will need to use Starbucks’ 2013 Annual Report (available on Blackboard). Prepare type-written responses to the following questions. Include appropriate references to the Annual Report. The assignment will be graded on correctness and presentation. Hand-written work will not be accepted and late assignments will have five points automatically deducted. 1. What types of inventories does Starbucks have? Coffee (Unroasted and Roasted), other merchandise (serveware and tea) held for sale, breakfast food, packaging and other supplies Pg69, Notes 5 Inventories 2. of the end of fiscal 2013, what is the balance sheet carrying value (book value) of Starbucks’ inventories? $1,111.2 Pg53, “Starbucks Corporation Consolidated Balance sheet” 3. Is this the same amount that Starbucks paid to its suppliers to purchase these inventories? Why or why not? Pg15, “Product supply” No. There were $882 million, comprised of $588 million under fixed-price contracts and an estimated $294 million under price-to-be-fixed contracts.The reason that there will be difference between the price that Starbucks paid to its suppliers and the value shows on balance sheet is $294 million price-to-be-fixed contract...
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...University of Phoenix Material Definitions Define the following terms using your text or other resources. Cite all resources consistent with APA guidelines. |Term |Definition |Resource you used | |Time value of money |The idea that money available at the present time is worth more |Time value of money TVM. (2014). Retrieved | | |than the same amount in the future due to its potential earning |from | | |capacity. This core principle of finance holds that, provided |http://www.investopedia.com/terms/t/timevalueo| | |money can earn interest, any amount of money is worth more the |fmoney.asp | | |sooner it is received. | | |Efficient market |An efficient market is a market in which all the available |Titman, S., Keown, A., & Martin, J. (2014). | | |information is fully incorporated |getting started principals of finance. | | |into securities prices, and the returns investors will earn on |Finanical Managment, principles and | | |their investments cannot be predicted...
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...The Panasonic Corporation having a shorter operating cycle because the inventory and receivable turnover ratio are higher. This kind of result is better for the business because the flow the capital is fast. The receivables turnover ratio, 2014 Panasonic had $7,736,541 in net credit sales. The ending balance for 2013 $882,575 and that on December 31 it had $933,975 accounts receivable. With this information, one could calculate the receivables turnover ratio for 2014 in the following way: $7,736,541 / [($882,575 + $933,975) / 2] = $7,736,541 / ($1,816,550 / 2) = $7,736,541 / $908,275 = 8.52 The receivables turnover ratio is higher it imply a variety of things about a company. It show that a company operates on a cash basis, where the collection process it takes only for 42 days for them to use the money again. It indicate that the company’s collection of accounts receivable is efficient, and the Panasonic Corporation has a high proportion of quality customers that pay off their debts quickly. This high ratio indicates that the company has a conservative policy regarding its extension of credit. This is a good thing, as this filters out customers who may be more likely to take a long time in paying their debts. The inventory turnover ratio is an efficiency ratio that shows how effectively inventory is managed by comparing cost of goods sold with average inventory for a period. This measures how many times average inventory is "turned" or sold during a period. In other words, it...
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...[pic] Report on eramic Industry Ltd Course Code: F-401 Submitted by Yasir Bin Yousuf Roll :16-36 Department Of Finance Submitted to Hussain Ahmed Enamul Huda Lecturer Department of Finance University of Dhaka Date of submission 1 August, 201 Executive summary The ceramic industry is surprisingly not quite a new one in Bangladesh. It dates back to 1962. People Ceramic Industries Ltd (PCI) pioneered the manufacture of porcelain tableware in Bangladesh (Khandaker and Alamgir 2006). According to Bangladesh Ceramic Ware Manufacturers Association (BCWMA), there are approximately 40 ceramic manufacturers operating in this industry producing tableware, sanitary ware and tiles. The major ceramic companies in the industry are Monno ceramics, R.A.K ceramics, Shinepukur ceramics, Fu-wang ceramics, greatwall ceramics, Peoples and national ceramics etc; there remains other 31 companies. Over the years, the ceramic industry in Bangladesh has flourished immensely and has gained recognition throughout the worldQuality of products has helped Bangladesh to carve a niche in the global market; the manufacturers in this sector are taking risks while diversifying their designs into world-class standards. The close competitors of Bangladesh are China and India, but they mostly produce traditional items. Moreover, due to recent global financial crisis and rising labor cost, the developed countries are placing more orders to low-cost countries...
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...Advising Business Customers JYSK A/S Business Plan Business plan - JYSK Table of Contents Introduction ............................................................................................................................................... 3 Problem statement ..................................................................................................................................... 3 Methodology .............................................................................................................................................. 4 Business overview ...................................................................................................................................... 5 Current position ..................................................................................................................................... 5 Competitive advantage .......................................................................................................................... 5 Growth plan ........................................................................................................................................... 5 Business strategy ........................................................................................................................................ 6 Tactics .................................................................................................................................................... 6 Strategic...
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...Department of accounting Acc 4291: integrated case study Chicken run Section <1> Semester 2 2011/2012 Members: Mastura hashim 0735072 Muhammad safwan mohamad 0723979 Siti aqilah talib 0733292 Table of Content Executive Summary Decision Maker What should Ms. Choy do? ~Analysis: 1) SWOT analysis 2) Fishbone diagram 3) Financial evidence ~Alternatives ~Recommendation and Action Plan Executive summary: 1998, Excel Poultry & Meat Sdn Bhd (EPM) was a SME located in Kluang, Johor, operating business of chicken farming and supplying chicken throughout Malaysia. This subsidiary of PCK holding since 2005 was managed by Encik Selamat, a Certified Public Accountant (CPA). It became one of top 5 chicken suppliers within mid-tier producers in the country due to increasing demand in year 2000 from superstores and fast-food chains, high chicken consumption by Malaysian, and expansion of chicken industry. However, in 2008, cost of poultry production increased. EPM operating cash was low and severe, that it “had puzzled Encik Selamat” (p.4). Other problems were also identified. Decision Maker: Credit Controller Ms Choy is the decision maker as she has the responsibility to make the right decision regarding unethical conduct of Encik Selamat, she can convince Board of Directors about En. Selamat. If she failed to convince BOD to take action, she can then reveal the issue to the auditor, besides mentioning to the auditor the lack of...
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...Introduction The goal of the study is to provide overall financial statement overview of The Boeing Company using the knowledge obtained during the Financial Management course. The main question of the study is how financially well the company is at the moment and what investment expectation it generates on the market nowdays. The Boeing Company background The company was originally founded by William Boeing on July 15, 1916, as "The Pacific Aero Products Company". Two years later it was renamed into “The Boeing Company”, on May 9, 1917. Since that date the company grew and acquired a lot of its competitors, including the McDonnell Douglas in 1997. [pic] The Boeing’s structure consists of two main divisions and two supporting divisions: - Boeing’s Commercial Airlines (BCA) - Boeing Defense Space & Security (BDS), which in turn consists of: o Boeing Military Aircraft o Network & Space Systems o Global Services & Support - Boeing Capital Corporation (BCC) - Other segments (including own Fire department and other non-profile activities) [pic] The Boeing Company’s Commercial Airliners division took the leading market positions up to 2003. Financial Ratios Analysis Liquidity Boeing’s liquidity ratios increased in 2010 and 2009 in comparison to 2008 values, but current and acid-test ratios are still below the industry average. Reasons: - the amount of money and short-term investments...
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...Google Inc. Company Analysis Paper FINA 3301 Wenxin Nie Introduction of Google Inc. Google Inc. is an American multinational corporation and specializing in internet-related services and products. It is in the leading status in the industry and covers almost 70% of market share compared to other searching engine. Google’s major competitors in the industry of Internet information providers are Yahoo and Facebook; as well as two Chinese corporation Baidu.com and Tencent.. In this case, I would discuss the competitors of Yahoo and Facebook in the following ratio analysis. Google Inc. is well known as an internet base searching engine, it also provides an integrated package of content and services, such as news, e-mails, instant messaging, maps, calendars, music downloads, video streaming and more, all in one place in Google. For the type of Google corporation, it generate revenue primarily by attracting very large audiences, charging advertisers for advertising placement, collecting referral fees for steering customers to other sites, and charging for premium service. The online advertising service has evolved into a primary source of revenue of Google. Furthermore, on August 15, 2011, Google announced an agreement to acquire Motorola Mobility, which is a leading company in the industry on mobile innovation and development. The acquisition of Motorola Mobility enables Google into a higher level of technology innovation development as well as generates more revenue and...
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...Cardinal Health, Inc. Financial Analysis XXXXX XXXXXXX TABLE OF CONTENTS Page no. EXECUTIVE SUMMARY 3 INTRODUCTION 5 FINANCIAL ANALYSIS 6 I. Liquidity Ratios 6 A. Working Capital B. Current Ratio C. Inventory Turnover D. Days in Inventory E. Receivable Turnover F. Average Collection Period II. Solvency Ratios 9 A. Debt to Total Assets Ratio B. Times Interest Earned Ratio III. Profitability Ratios 11 A. Earnings Per Share B. Gross Profit Rate C. Profit Margin Ratio D. Return on Assets Ratio E. Asset Turnover Ratio APPENDICES 15 REFERENCES 17 EXECUTIVE SUMMARY XXXXX will attempt to analyze the efficiency and profitability of Cardinal Health, Inc. by conducting an examination of a series of financial ratios for the past three years. This analysis will include a comparison of Cardinal Health’s chief competitor, McKesson Corporation. XXXXX exploration of the financial performance of both companies will be accomplished by evaluating their liquidity, solvency, profitability ratios. It is through a careful analysis of these ratios that should determine Cardinal Health’s overall value to investors Liquidity Ratios: Capital Health’s sizable Working Capital of $3.3 Billion in 2012 should help it to meet its short-term obligations in the event that it should need to liquefy its assets. Cardinal Health’s increase in Working Capital from 2011 to 2012 can be seen as a sign...
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...Fact Pattern: Butler Lumber is a retail distributor located in a growing suburb in the Pacific Northwest that sells basic wood products like plywood, moldings, and sash and door products. The company was formed in 1981 by Mark Butler in partnership with his brother-in-law, who Mark then bought out in 1988. The company has experienced significant growth over the past few years, and is expecting to continue to see sales growth in the coming year. Although the company has experienced increasing sales and claims to be profitable, it has been experiencing a cash shortage and Mark feels that it is going to be necessary to borrow more money in addition to the debt that he has already incurred over the course of the past few years in order to continue business. The bank that Butler has been conducting business with, Suburban National Bank, has a maximum allowable loan value of $250,000. Mark has had a difficult time staying below this debt limit, and only has been able to do so by relying on trade credit. Suburban has also now decided that it will begin requiring Butler to secure any additional debt with real property as collateral. Another larger bank, Northrop National Bank, is a larger establishment and has discussed the possibility with Mark of possibly extending a line of credit to Butler of up to $465,000. Although Mark believes that the $465,000 is more than he will need to borrow, he likes the idea of having the flexibility of the additional cash. Mark is faced with...
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