MARIA HERNANDEZ VAN NESS TEAM 10 The Story: Maria Hernandez & Associates is a company that started its business with a cash deposit. On June 20,2004 Maria Hernandez transferred all her savings of $30,000 into a new Bank account under her company’s name, two days later she transferred another $20,000 which she had borrowed from her father on a 6% p.a. interest rate. Thus, with an amount of $50,000 in its bank account Maria Hernandez and Associates was ready to start its life in the Webpage designing sector. After the Bank account transactions, Maria Hernandez quickly took care of the initial expenses that included pre-paid rent for the new office, giving a security deposit for the same, buying used computers and software from her …show more content…
The company is keeping 9.8 cents of sales as earnings for every dollar that the company earns. It is a good sign because the company was able to recoup the initial fixed costs and also showed a profit in the books within 2 months, on the other hand the usual trend for web-page design companies to show a profit is 1-2 years. Debt to equity ratio indicates extend to which the business relies on debt financing. As we know, Maria Hernandez borrowed $20,000 from her father at 6% interest rate and invested $30,000 cash from her own savings. In addition, the company made revenue of $40,000 in cash that helped to cover all the expenses and operational purchases. So, we can conclude that the company is growing on cash mainly and in the tech industry this ratio is bound to go down, because once the assets [computers and software] are acquired there is no need to take on debt to grow the company, as the growth can come from the revenue itself. On an average computer companies have a Debt to Equity ratio of under 0.5 Current ratio that shows the ability of the company to pay off its liabilities at a given period of time is the only point of concern. As a rule the acceptable figure is between 1 and 2, in our case we have 4.17, what means that Maria Hernandez can pay off her loan with interest however, she has some excessive cash on hand what indicates inefficient management of funds. Suggestions: We would first like to address the matter of treating the Interest and
2) The higher ratio of Debt to Total Equity may result to the lower of the debt credit rating. The lower of the credit rating will result to increase of the interest rate which will cost more to the company.
The current ratio directly relates the company’s current assets against its current liabilities. A good current ratio will be over 1. For example if the current ratio were 2.0 this would mean that the company’s current assets are twice as large as its current liabilities. For Tesla Motors the current ratio drops significantly over the years. It starts at 2.76 in 2010, then drops to 1.95 in 2011, and finally reaches 0.97 in 2012. As you can see the current ratio in 2012 is below one. The current ratio of 0.97 means that as of December 2012, Tesla Motors has more current liabilities than current assets.
The current ratio measures the company’s ability to pay its short term obligations with its short term assets. Between Coca Cola and PepsiCo, PepsiCo has a higher current ratio implying that is more capable of paying its obligations. The debt management policies of Coca-Cola in conjunction with share repurchase program and investment activity resulted in current liabilities exceeding current assets. From the ratio Pepsi Co suddenly had to pay all its short-term
The current cash debt ratio only measures the ability of a firm 's cash, along with investments easily converted into cash, to pay its short-term obligations. In 2007, the company has a current cash debt ratio greater than 1 and is in better financial shape than in 2006, when the ratio was less than 1.
A hispanic female named Anna Garcia who was 38 years of age, was found dead on the date of August 14, 2015 in Anytown, U.S.A. She was 64 inches in height and 165 pounds. The case of Anna Garcia first began on a hot, 92°F summer morning. A next door neighbor, Doug Greene, had decided to call police at 9:45 am to place his concern about Garcia because of her dog that had been barking all morning, which was highly unusual. Being that he had not seen or heard from her since the previous morning, he called her, then went over to her house to make sure nothing was wrong. Both the police and EMT arrived at 9:56 am. When questioned by police, Greene informed them that he had seen her the previous morning around 6:30 am walking her dog. He also stated that he saw her wearing a sweater, which was found odd because of the current heat wave. The front door had to be broken down in order to enter the house. Upon entering the house, they found Garcia lying face down in the entry hallway. Inside, the house was a temperature of 73°F. Immediately after Anna Garcia was
Ms. Juanita Machado is a Line Assembly Technician. She was employed with the insured approximately for seven months. Within the seven months, she has been with the company; she had known of the claimant, Mr. Donald Arauz after he had been hired early on last year in 2016 when he was hired to the same position that she currently holds.
This ratio indicates whether it can respond to the current liabilities by using current assets. As many times, we can cover short-term obligations, as better for the company. This indicates that significant and high improvement in the liquidity. The increase in the current ratio 11.5 % will result in an increase in current assets where the current liabilities increased by 2.1%.
The current ratio shows the short-term debt-paying ability of the company also known as liquidity ratio. Components of the current ratio are current assets and current liabilities. To find the current ratio, divide current assets by current liabilities. For example if a current ratio was 2:1, then that company would be able to pay off its short term debt easily. But you should also look at the types of debt the company has because some assets might be larger. For the current ratio a rule of thumb is the ratio should be around 2:1. The company wants to at least make sure that the value of the current assets covers at least the amount of the short-term obligations. In 2013 the current ratio is 1.75 and in 2014 the current ratio is 1.8. This is showing a favorable
On 04/21/2017 at 1636 hours, the complainant Miriam Salazar, arrived at the Bladensburg Police Station to report a fraud that occurred at T-Mobile 8427 Greenbelt Road Maryland 20710.
Our case was initiated when the Greater Southwest Region Investigations Office received information from Sharon A. Martinez, General Services Administration (GSA) Fleet Transportation Operations Specialist, pertaining to the apparent fraudulent use of Fleet Cards assigned to the 8th Prior Service Recruiting Office. Martinez advised numerous fraudulent transactions occurred on Fleet cards which had been reported lost.
Overall regards to liquidity ratios, the higher the number the better; however, a too high also indicates that the firms were not using their resources to their full potential. Current ratio of 1.0 or greater shows that a company can pay its current liabilities with its current assets. JWN’s ratio increased from 2.06 in 2007 to 2.57 in 2010, and slightly decreased to 2.16 in 2011. JWN’s cash ratio increased significantly from 22% in 2007 to 80% in 2010. JWN has a cash ratio of 73% in 2011, which is useful to creditors when deciding how much debt they would be willing to extend to JWN. In addition, JWN also has moderate CFO ratio of 46%, indicating the companies’ ability to pay off their short term liabilities with their operating cash
As the creditors’ view, they prefer the high current ratio. The current ratio provides the best single indicator of the extent, which assets that are expected to be converted to cash fairly quickly cover the claims of short-term creditors. However, consider the current ratio from the perspective of a shareholder. A high current ratio could mean that the company has a lot of money tied up in nonproductive assets.
CURRENT RATIO show a company’s ability to pay its current obligations that is company’s liquidity. The current ratio position is lower for Honda at 0.33 than for Toyota at 1.22 in 2010. Honda has a large portion of receivables in assets both in trade, notes receivables and finance receivables. It has a huge portion of cash as well. This indicates the company has no problem in terms of generating a positive influx of assets. But in terms of liabilities it has a large portion of short term debt which makes almost 1/3rd of total Current liabilities. Also there is a significant portion of Long Term debt. The higher level of liabilities in the denominator reduces the overall ratio.
Current Ratio is the relationship between a company’s current assets and current liabilities. This form of liquidity ratio also shows if the company can pay its current liabilities. A company’s current ratio can be formulated by dividing the current assets by the current liabilities. In 2016, Starbucks had a ratio of 1.05, which shows that the company has 5% cash and assets that could cover all current liabilities, thus it should not have any problems paying its current liabilities.
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).