Delta Airlines Ratio Analysis

Aspire’s Quick Ratio below the industry average for year 1999-2000. The company appears to have higher risk than that of the industry. The current ratio and the quick ratio are below the industry average for year 1999- 2000. Thus, the company would have difficulty covering its obligations when compared to other companies within the same industry.

Nance et al. also argue that firms can reduce the expected financial distress and agency costs associated with long-term debt by maintaining greater short term liquidity. The variable used as proxy for a firm's short-term liquidity is the quick ratio. The quick ratio, a variant of the current ratio, measures a firm's ability to repay short-term operating liabilities with readily available cash.

Quick ratio is another measure of liquidity. In quick ratio we consider only liquid assets and its standard ratio is 1:1. Quick ratio of Peyton Approved is 7.63. Thus, there is no doubt that the company has got excellent liquidity. Company has enough liquid assets to pay off current liabilities.

1. You are analyzing a company that has cash of $2,000, accounts receivable of $3,700, fixed assets of $10,900, accounts payable of $6,600, and inventory of $4,100. What is the quick ratio?

“Delta Tops Airline Performance Ranking”, according to Justin Worland’s 2014 article in TIME magazine. The article continues about how Airfare watchdog’s annual rankings raised Deltas performance from sixth place in 2013 to king of the airways in 2104. Delta Airlines Inc.’s performance is the best option for fliers; provide Delta service their region, which is highly probable (Worland, 2014).

This ratio is similar to current ratio, except that it excludes inventory from current assets. Inventory is subtracted because it is considered to be less liquid than other current assets, that is, it cannot be easily used to pay for the company’s current liabilities. A company having a quick ratio of at least 1.0, is considered to be financially stable. It has sufficient liquid assets and hence, it will be able to pay back its debts easily (Qasim Saleem et al., 2011).

Looking at the chart in Appendix D, the quick ratio for Bombardier is .53 and the industry is at .62 for the most recent quarter (MRQ). This is not a number that I would feel comfortable with. A low quick ratio can mean that the company is in trouble. The current ratio shows at 1.13 for Bombardier and .94 for the industry. Because this ratio is higher than the industry average, it shows that the firm has the ability to pay back its short-term liabilities such as debt and payables with its short-term assets like inventory, receivables, and cash.

The Quick Ratio also known as Acid Ratio is used by firms to determine liquidity position. It explains if the firm is able to pay all of their current debt liabilities. (Dyson, 2010) The graph above illustrates that over the period from 2007 to 2011 quick ratio was not more that 1, which means that their debts might not be covered all. The graph also indicates that a peak was in 2011.

In this paragraph I will be discussing the liquidity of UPS, by analyzing the current ratio and quick ratio. The current ratio lets potential investors see the ability of companies to pay off their short-term liabilities, with their short-term assets. It also can tell investors the financial health of the company as well, so if it is below 1 then the company has problems and can potentially go bankrupt. For UPS the current ratio is 1.14, which is below the industry average of 1.32. It is still good, since it shows that UPS is able to pay off their debt with just their short-term assets alone; also, that they are good financial health. Next, is the quick ratio, which lets investors see if a company can meet their short-term obligations, with

There are two ways to calculate the quick ratio. One is to subtract inventory from current asset and then divide by current liabilities. Another way is to add cash, short-term investments, and accounts receivable, then divide by current liabilities. The second way is used here because Netflix does not have any

There will now be a look at the profitability aspect of Qantas airways operations. The following ratios have been selected for the last two most recent years of 2015 and 2016 these are the Gross profit margin, return on equity (ROE), and Return on Assets (ROA).The Ability to make profits and secure returns for investments are key indicators of a company’s financial viability (Birt, Chalmers, Maloney, Brooks, & Oliver, 2012). This is illustrated by the large increase in earnings per share seen in the market performance section. In the data,

The quick ratio reflects on a company’s ability to meet its current liabilities without liquidating inventories that could require markdowns. It is a more stringent test of liquidity than the current ratio and may provide more insight into company liquidity in some cases. For Colgate-Palmolive, the quick ratio has declined from 0.73 in 2008 to 0.58 in 2010. While this does not necessarily mean a problem, a higher current ratio and quick ratio analysis will mean that the company will not have difficulty in meeting its short-term obligations from its operations and not by liquidating its assets.

Higher quick ratios are more favorable for companies because it shows there are more quick assets than current liabilities. In 2016, Apple with a quick ratio of 1.22 indicates that quick assets equal current assets. This also shows that

To measure the Exelon’s bottom line, you must have knowledge of their financial strength. The Quick Ratio measures a business’s ability to meet its short-term debts with its most liquid assets. It measures the dollar amount of liquid assets available for each dollar of current liabilities. The current Quick Ratio for Exelon of 2.14 is

It is also called as the acid test ratio, this measures immediate liquidation ability of a company. The quick ratio of a healthy company should be 1 or higher. It is more reliable than the Current ration because inventory, prepaid expenses, and other less liquid current assets are excluded from the calculation. The quick ratio for UPS has remained relatively consistent over the past five years with no more than a 0.41 change and the high is at 1.65 with a low of 1.24. It shows that UPS has a very strong ability to meet its short-term obligation.