Balance Sheet and Income Statement Commentary

2279 WordsFeb 25, 201310 Pages
Balance Sheet and Income Statement Commentary BSA/500 – Business Systems I July 2, 2012 Balance Sheet and Income Statement Commentary JB Hunt (Trucking and logistics) On JB Hunt’s balance sheet for 2011 lists current assets of $513,542,000 and current liabilities of $438,515,000, yielding a current ratio of 1.17, which indicates the company, has $1.17 of current assets for every $1 of current liabilities. The previous year 2010, the current ratio was 0.91. This shows a 29% increase in the current ratio over the previous year. An organization with a current ratio of 2 or higher is usually viewed by lenders to be a safe risk for short-term credit. Based on the 29% increase in current ratio, JB Hunt is in a better position to obtain…show more content…
UFP Technologies’ return on equity ratio for 2011 is 17% and 18% for 2010. This ratio assesses risk by indicating how much a company earned for each dollar invested by shareholders. UFP Technologies’ equity ratio of 17% is a profitable ratio especially since investors consider a ratio over 15% to be a reasonable return. However, the ratio decreased by 5.5% over last which may be upsetting to shareholders who are looking for an increase in this ratio year after year and not a decrease. United Natural Foods, Inc. (Specialty food stores) United Natural Foods’ balance sheet for 2011 lists current assets of $8,444,492,000 and current liabilities of $463,421,000, yielding a current ratio of 18.22, which indicates the company, has $18.22 of current assets for every $1 of current liabilities. The previous year 2010, the current ratio was 1.37. This shows a 1,229% increase in the current ratio over the previous year. An organization with a current ratio of 2 or higher is usually viewed by lenders to be a safe risk for short-term credit. With a current ratio of 18.22 United Natural Foods would definitely be view favorably by lenders if the need arose to seek short-term credit. United Natural Foods’ quick ratio for 2011 is 0.59 and for 2010 was 0.44. The quick ratio is especially important to companies that have a history of challenges with converting inventory into cash quickly. A quick ratio between 0.50 and 1.0 is
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