Chase Corporation is a manufacturer that creates numerous different products for the Industrial Materials segment as well as the Construction Materials segment of the market. They were founded in 1946 and create their products all over the world. Chase Corporation is separated into the two operating segments based on how the goods are manufactured and delivered to their markets (United States Congress, 2017). The Industrial Materials segment of the business specializes in products that are used in another company’s product whereas the Construction Materials segment is concerned with project-oriented product offerings. In the Construction segment, they offer “Chase” branded products. Depending on the type of product Chase is producing and for …show more content…
In regards to the debt ratio, Chase went down 6% from 2015-2016. Only 34% of their assets are financed through debt and when looking at a debt ratio, you want to see a lower percentage. For Chase’s debt to equity ratio, it too has decreased during the 2016 fiscal year. An ideal debt to equity ratio is 1:2, lenders to stockholders, and Chase Corporation had a ratio of 51%. This is almost perfect to the ideal ratio. Both the gross profit margin and net profit margin are low, 39% and 14% respectively, but we can see that they have improved from the previous fiscal year and are higher than the industry averages. Ideally you want to see a higher percentage when looking at gross and net profit margin as they indicate how efficiently sales are being turned into gross profit. The rising profit margins is encouraging and with Chase continuing to purchase stock in other companies, it may continue to rise in the coming …show more content…
The earnings per share is $3.54, while the price earnings ratio is at 18.21. Chase Corporation turns over their inventory about 5 times in a fiscal year, lower than the industry average of about 7. Their days’ sales outstanding (DSO) rose during fiscal year 2016 to about 70 days. An increase means that it is taking longer for the customers to pay the bills, but it was only an increase of about 2 days. Along with the increase to the DSO it took Chase about 58 days to collect their accounts receivable and they had an accounts receivable turnover ratio of about 6 times per year. This was consistent with the previous year. Finally, when assessing the liquidity of the current assets and liabilities, in regard to whether the current assets could pay for the current liabilities if need be, I found the current ratio to be 2.03:1, which is good. This means that for every dollar of current liabilities, there are two dollars of current assets. Getting more specific, when a quick ratio was run, comparing the most liquid current assets to the current liabilities, the ratio was 1.69:1. This ratio allows companies to check and see if it can cover the current liabilities without selling the
This is no surprise due to the major expansion that CC took on in 2001. Lastly, the long term debt to capitalization ratio slowly decreases which is just showing how CC is not being risky with their capital through debt.
Debt to Equity Ratio of 1.23 more than 1 reveals that more than half of assets are financed by debt.
An organization’s current ratio shows how liquid the assets of the agency are by comparison to the short term debts that the agency must pay to continue its operations. This ratio is calculated by taking the assets that can be converted to cash within a year (current assets) and dividing it by the liabilities that are either currently due or will become due within a year (current liabilities). The current ratio, ideally, should be at
Sobeys Inc. Debt Ratio in 2012 was 54.2%, meaning that 54.2% of assets have been financed by debt and has a slightly higher degree of leverage than what is considered comfortable. It could prove slightly harder if a recession happened than a company who is only leveraged at 30% to 40%, However, this ratio does not provide any indication of the asset quality being taken into consideration. The ratio did drop from the 2011 value of 55.1%
First of which, is the current ratio. It has been rapidly declining since 2000. To me this indicates that there is a liquidity issue. Each year their trade debt increase exceeds the increase of net income for the company. As a result, the working capital has taken a nosedive from $58,650 in 2002 to only $5,466 in 2003.
This paper will give a summary of Target corporation versus Wal-Mart stores, Incorporated. In the following weeks it will compare the financial performances of these two companies, by evaluating circumstances such as the times interest earned, return on equity, return on assets and other factors. This paper will present an overview of the exchanges on which both company’s stock is traded. It will also present characteristics of that particular exchange which may have led the company to be listed there versus another exchange. This summary will also explain the types of securities both Wal-Mart and Target have outstanding, such as the bonds, preferred stock or the common
Increase in current liabilities Substantial increase in current liabilities weakened the company’s liquidity position. Its current liabilities were US$2,063.94 million at the end of FY2010, a 48.09% increase compared to the previous year. However, its current assets recorded a marginal increase of 25.07% - from US$1,770.02 million at the end of FY2009 to US$2,213.72 million at the end of FY2010. Following this, the company’s current ratio declined from 1.27 at the end of the FY2009 to 1.07 at the end of FY2010. A lower current ratio indicates that the company is in a weak financial position, and it may find it difficult to meet its day-to-day obligations.
“The current ratio is a liquidity and efficiency ratio that measures a firm’s ability to pay off its short-term liabilities with its current assets” (Current Ratio 2018). Since current liabilities are often due in less than a year, the current ratio plays a signifcant role in measuring the company’s liquidity. In other words, the company’s window of opportunity to obtain the funds necessary to cover current liabilities is short. Furthermore, the company relies on its ability to secure its most liquidable assets, which include: cash, cash equivalents, and marketable securities, and then being able to convert them into short-term funds. If the company is unable to obtain the necessary funds to cover its short-term obligations, the company may
Liquidity ratios measure the ability of a firm to meet its short-term obligations. A company that is not able
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
What Is Strategic Management a process for defining and addressing the management implications of an organization's strategic and operational plans? A long-term context for short-term activities. Strategic management is the analysis of the work done by the management of an organization on behalf of the owners. It gyrates around expressing the purposes of the organization and coming up with an appropriate mission and vision statement. Mission and vision statement together are used to help develop policies and plans to be used in long term and short term goals often categorized as projects or programs. It also involves the right resources of management to ensure that the business profit are maximized to grow the company. Strategic Competitiveness
The financial statements included tend to combine cash and marketable securities into a category labeled “cash and cash equivalents”. If the cash ratio is recalculated using this value instead of simply cash than the ratio improves to 1.10, which shows much stronger liquidity capabilities.
As for Accounts Receivable we need to take a look at the ratio called Days Sales in Receivables which is 365 / Receivables Turnover. This is also given to us as 157 days which means that it will take 2.32 times for the company to cover its accounts receivable and
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.
Current ratio of Company X and Y is 1.80, and 2.55 respectively. This ratio presents the proportion of current assets to current liabilities. This ratio provided a measure of degree to which current assets cover current liabilities. Since both companies have excess of current assets over their current liabilities, they met basic requirement of safety margin against uncertainty in realization of current assets and funds flows. Generally, it is suggested that a firm should have neither a very high ratio nor a very low ratio. Very high ratio implies heavy investments in current assets reflecting under utilization of the resources. A very low ratio endangers the business in to risks of not being able to pay short term requirements. Normally, it is advocated to have the current ratio as 2:1 (Baker and Powell, 2009).