Cango Week 3 Financial Analysis

Asset turnover (T/O) demonstrates how effective the asset base is in generating top line revenue. High T/O values have implications in terms of plant structure, level of backward integration, and aggressiveness of pricing policy. CUMULATIVE PROFITS Formula Cumulative Profits is the total Description of all year 's Net Profit. :

Total asset turnover : This ratio measures the efficiency of a company’s use of its assets

CanGo’s operating and net profit margins seem satisfactory at 10.97% and 16.5% respectively. Investors do

This consulting report concerns CanGo’s attempt to establish new business ventures to enhance the vitality of the organization through entering the enormous electronic gaming industry that is rapidly expanding. There is a significant amount of demographics that will embrace the virtual world of On-Line Gaming, since electronic entertainment has been revolutionized through increasing access to interactive online gaming with access to high-speed internet. Thus more, global games industry revenues were at 60.4 billion in 2009 and expected to rise to 70.1 billion in 2015. The value of this proposition is to increase revenues, increase speed, expand

Return on Total Assets was 4.43% which is below five percent. That indicates that the company is not accurately converting its assets into profit. The total for Return on Stockholders’ Equity was 8.89%, however financial analysts prefer ROE to range between 15-20 %. The company’s low ROE indicates that the company is not generating profit with new investments. Lastly, Debt-to-Equity ratio for the company was 1.01 which indicates that investors and creditors are equally sharing assets. In the view of creditors, they see a high ratio as a risk factor because it can indicate that investors are not investing due to the company’s overall performance. The totals of these three ratios demonstrate that the company’s financial state is not as healthy as it should be.

The liquidity ratios of the firm are slightly below the industry averages. This is due to inventory and accounts receivable making up a significantly larger portion of the current assets than cash and marketable securities. This may be indicative of a problem with inventory management and/or collection on accounts.

Reserve coverage ratio, despite the increase in loss reserves, is decreasing dramatically, from 213% in 2006 to 87% in June 2008, indicating an enormous increase in non-performing assets (NPA). The main reason on increase in NPAs the fact that high percentage (32.9%) of company’s total loans is Real Estate loans. This is the reason that company’s interest income has decreased despite the increase in loans made in 2008. Efficiency ratio is basically an operating expense margin measure, the lower the better. The above 60 percent efficiency ratio, 50 percent generally regarded as optimal, is an indicator of company's deteriorating performance.

Taking a look at liquidity ratios, Gemini Electronics is in a fairly good position. Gemini has improved the company’s current ratio. The idea behind the current ratio is to get an idea of whether Gemini has enough short-term assets to use to pay off short-term liabilities. Therefore, a higher current ratio is better. With regards to quick ratio, higher is better. However, in 2009 Gemini’s quick ratio has decreased very slightly. This could be due to the fact that quick ratio is more conservative, excluding inventory and other assets that can be more difficult to turn into cash quickly. This slight decrease would not be considered something to be overly concerned about at this point in time.

It is an indicator of managerial capabilities to effectively and efficiently utilize company’s assets (Mathur 2000). It includes analyzing the average collection period,

Abbott’s fixed asset and total asset turnover ratios can tell us how well the firm uses its assets to generate revenue. The fixed asset ratio provides the proportion of sales to fixed assets and tells us how much revenue is

2. Asset Turnover rate (Revenue/ Asset) this ratio can measure how efficiency Sears to use its asset for revenue.

This class of metrics can show how effectively Amcor use its assets. It can help shareholders, creditors and investors know the usage of asset and shareholders also can know management’s operating effectiveness. In addition, show managers where to focus their efforts. So for the shareholders of AMC, it is interesting to take into account the following ratios: receivable turnover, average collection period, inventory turnover, fixed asset turnover and total asset turnover.

Our choices led to a constant increase in net income over the three years. Short term debt increase by approximately 100% percent but steadily reduced over the next three years. We were happy with the positive growth of the company and the fact that we were able to pay off most of the initial short term funding required by the increase in working capital requirement. Overall the current situation of the company in 2018 is good, although the total value created is less than 20% of that created in phase 1. From this we learned that the value of the firm can be significantly increased more through a reduction in working capital requirement than through increasing the firm’s sales and net income.

The quick ratio of 1.46 is a further analysis into the actual monetary values that are highly liquid and excluding fixed assets as part of the assets. The CFO/Avg. current liabilities also show a healthy 73%, 28% in 2004, on average of which is still higher than the industry.

The purpose of this memorandum is to provide organization’s financial analysis by identifying our position and performance as well as to assess Riordan Manufacturing’s future financial performance. Our team has evaluated the three broad areas of profitability, risk and source and uses of funds. The liquidity ratios are the following: the current ratio is 4.72 which mean that for every dollar in current liabilities, there is a $4.72 dollars in current assets. Compared with the