Investigating The Profitability, Liquidity And The Solvency Of Xerox 's Performance

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2, Analyzing When analyzing Xerox’s performance in the past, we choose to use the profitability, liquidity and the solvency. A. profitability 1.Return on Equity Net Income/Average Shareholder’s Equity 2014 992/((10709+12419)/2) 8.58% 2013 1179/((12419+11664)/2) 9.79% Comment ROE has decreased 121bps from 2013 to 2014, which means Xerox’s performance in using the resources provided by shareholders to generate net income is getting worse. 2. Return on Assets Net Income/ Average Total Assets 2014 992/((27658+29036)/2) 3.50% 2013 1179/((29036+30015)/2) 3.99% Comment ROA has decreased 49bps from 2013 to 2014, which means Xerox’s performance in using assets to generate net income is getting worse. 3. Return on Assets, adjusted for financing…show more content…
9. Financial Leverage Ratio Avg. Assets/ Avg. Equity 2014 ((27658+29036)/2)/((10709+12419)/2) 2.4513 2013 ((29036+30015)/2)/((12419+11664)/2) 2.4520 Comment Financial Leverage Ratio has decreased a little bit from 2.4520 in 2013 to 2.4513 2014 and we can tell that financial leverage barely changed. 10. Accounts Payable Turnover Ratio Purchases/ Average Accounts Payable Purchase Purchase=COGS-Inventory Beginning +Inventory Ending 2014 (3269-998+934)/((1584+1626)/2) 1.9969 2013 (3550-1011+998)/((1626+1913)/2) 1.9989 Comment Accounts Payable Turnover Ratio has decreased a little bit from 1.9989 in 2013 to 1.9969 in 2014. But the change is so small that we can tell Accounts Payable Turnover Ratio barely changed. 11. Days Accounts Payable Outstanding 365/Accounts Payable turnover 2014 365/1.9969 182.78 2013 365/1.9989 182.60 Comment Days Accounts Payable Outstanding has increased from 182.60 days in 2013 to 182.78 days in 2014. But the change is so small that we can tell Days Accounts Payable Outstanding barely changed. 12. Accounts Receivable Turnover Ratio Sales/ Average Accounts Receivable 2014 5288/((2652+2929)/2) 1.8950 2013 5582/((2929+2866)/2) 1.9265 Comment Accounts Receivable Turnover Ratio has decreased from 1.9265 in 2013 to

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