Difference Between The Ratio And The Dividend Ratio

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Probability Ratios
Garners Platoon Mental Health Care’s ratios illustrate that it is more profitable than the average in its industry (Cornett, Adair, & Nofsinger, 2015). Its profit margin, BEP, ROE, and ROA are all considerably higher than its industry figures. However, the dividend payout ratio is lower than that of the industry which is not necessarily a bad thing because you typically want this number to be lower than higher (Holt, n.d.). This indicates that the company is keeping more money than paying out for future development or plans (Cornett et al., 2015). A lucrative company that keeps its profits expands its “level of equity capital as well as its own value” (Cornett et al., 2015, p. 88).
Liquidity Ratios
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Thus, it is producing fewer dollars of sales per dollar of inventory (Cornett et al., 2015). Garners’ has to pay more in storage than its competitors since it is taking them longer to turn their inventory over.
Garners’ accounts receivable management ratios appear to be lower than its industry average which is an indication of good management since it desires to receive payment sooner than the industry average (Cornett, Adair, Nofsinger, 2015). The company could have too much control on its crediting terms, and might look into decreasing its crediting procedure slightly; however, for the most part, the company is doing well in collecting payments.
The average payment period is 40.9 days higher than the industry average, and its accounts payable turnover is 2.59 times; therefore, providing that the company is paying its bills on time, Garners’ is reducing opportunity costs due to its debt management (Cornett, Adair, Nofsinger, 2015).
Garners’ fixed asset ratio is .25 below the industry average which could indicate that management is not using its assets to its fullest. However, since Garners’ total asset turnover ratio is slightly higher than the industry average, this number shows that Garners’ management is using its assets accurately.
Debt Ratio

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