Financial Analysis of Sobeys Inc.

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.

Macy’s often has a furniture sale around any holiday. In July, 2013, I purchased a leather sectional from Macy’s for around $5000.00. The promotion was no money down, zero interest for three years. At the time, I did not have a balance on my revolving account (department store). However, during the course of this purchase, I eventually made purchases in the department store and based off my past experience; however, Macy misapplied my payments. They split the payments and applied the payment to both accounts. The payments range from $200-$250 a month with a plan to pay off the before any interest kicks in.

Overall the liquidity of the company is very stable, THI working capital is healthy and the company is able to support its short term business needs in an efficient manner.

Net worth/total assets: The trend is downward. The industry ratio is 61.5%, which is much higher than Lawsons. It may cause difficulty in raising additional capital and a danger of encouraging irresponsibility by the owners and of leaving inadequate protection for the company’s creditors.

which gives a net profit margin of 2.22%. The net profit margin for the previous accounting period was 1.92%. This indicates that the company has produced an increase in profit per dollar from one accounting period to the next. The competitors had a net loss for the accounting period ending 2010.

Shoppers Drug Mart Limited is not in a good financial position in terms of liquidity and being able to pay out its liabilities. Over the three above indicated fiscal periods, Shoppers had a current ratio on average of 1.54, which means that it has $1.54 of current assets available to cover each $1 of current liabilities. The higher the current ratio is for a firm, the better position the company’s liquidity position is. Over the course of a year or over the course of the company’s operating cycle (whichever is longer), resources would be tight for Shoppers but they would be able to pay out their current obligations as the current ratio is greater than 1. In the time period less than a year or the operating cycle, repayment of the firm’s liabilities may prove to be challenging. The quick ratio also measures a company’s liquidity position but there

When comparing the debt-to-assets ratio of McDonalds and Wendys, you have to divide the firms total liabilities by their total assets. Essentially, the debt-to-assets ratio is the primary indicator of the firms debt management. As the ratio increases or decreases, it indicates the firms changing reliance on borrowed resources. The lower the ratio the more efficient the firm will be able to

As the cash ratio is below 1 in three years, the company needs to sell other assets as well to pay its short term debts. In order to avoid bankruptcy in the near future, the company should maintain enough cash to meet its 3 months short term liabilities.

Drax group Plc on the other hand, has experienced drastic compression of its equity value. As of the year 2011 the company was faced with a dept ratio of about 0.54. This failed to reduce, and instead went higher and as at the end of 2015, the company dept ratio was about 1.02. This simply means that, the company dept is higher than the company’s value, therefore financial distress in future is highly likely for Drax group

To be exact, S&S Air’s current ratio was 0.7498, compared to a median of 1.43 and upper quartile of 1.89. This means that S&S Air has $0.7498 in current assets for every $1 in current liabilities. Moreover, the company’s current ratio is less than 1, which translates to its current assets being less than its current liabilities and this is clearly visible

SolvencyGearing | 643/659.6 = 97.48% | 500.3/503.4 = 99.38% | Interest Cover | 183.7/27.3 = 6.73 times | 189.7/56.5 = 3.36 times | Investors RatiosEarnings per Share | 117.2/1287.1

The current ratio signifies a company's ability to meet its short-term liabilities with its short-term assets (Kimmel et al., 2011). The equation for current ratio is current assets/current liabilities. In 2013 Walmart’s current ratio was 2.83 and in 2014 it was 2.95 therefore between 2013 and 2014 there was a 0.12 increase in Walmart’s current assets to current liabilities (Walmart, 2014). This slight increase could signify that Walmart had the ability to improve liquidity and they are managing their working capital appropriately.

Walmart’s liquidity ratios is a positive and steady projection of the ratio-values, which is an indication that the company is operating under a healthy environment. For example, the quick ratio is used to present the value of assets that are to offset financial obligations. In this case, the company has maintained a 1:1 ratio, which means that for every financial obligation there is a counterpart of another asset that can be used to pay for it (Stock, 2014). Therefore, inventory turnover ratio depicts an increase altogether. The percentage increases from 10 % in 2013 to 10 % in 2014, whereas, the stock is being converted into revenues at a significantly higher rate, thus, the company is placed fairly to support its operational activities. The asset turnover percentage remains steady at 2 % meaning that fewer assets are not properly managed, the company is able to support its day-to-day activities (Stock, 2014). Walmart has enough assets within the company to reach that can be used to take care of the immediate financial obligations (Stock, 2014).

Total debt ratio remained stable in all periods in 2011 and is below 1:1, which is a good indication of the company maintaining its leverage. Interest coverage ratio shows a downward trend in Q2 and Q3 with a slight increase in Q4. These results are derived from an increase in interest expense. These changes are not very significant to the success of the business as the company’s ratio is well above 1.5, which implies the company is not burdened by its debt expenses. Debt/Equity ratio remained stable in all periods with a slight increase in Q4 as a result of increased liabilities.

When the firm is not able to or is difficult to honor the promises to the creditors, this situation is called financial distress. The firms need to figure out new ways to generate income and cut costs. At the same time, the money borrowed to finance the assets could be more expensive. As the financial institutions and banks may increase the rate charged for borrowed assets when a company is in financial distress. According to the definition of the financial distress, due to the increasing of the risk, the debts value of debt holders would devalue. From the perspective that the firm value is the sum of share value and the debt value, this decrease the firm value, and made it an important part of the costs of financial distress. In order to give the prediction of the value of the firm would survive, we need to know the history market performance, the history industry performance and the firm’s performance. For Capilano Honey Ltd, the agricultural commodities industry keeps growing in recent years and the growth rate is 13.38 percent in 2015, which is the highest rate in recent years.