Merger and Acquisition of Hoya Corporation and Pentax .

Return on assets is an efficiency ratio. It compares the profits generated with the asset base required. It answers the question, how hard

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.

* Return on assets (ROA) – ROA shows how successful a company is in generating profits on the amount of assets they own. Since assets consist of debt and equity, ROA is a measure of how well a company converts investment dollars into profit. The higher the percentage, the more profit a company is generating per dollar of investment. Similar to ROS, this ratio needs to be looked at compared to the industry as different industries have different requirements that can affect ROA. For example, companies in the airline and mining industries need expensive assets to operate so will have lower ROA’s compared to companies in the pharmaceutical or advertising industries.

First of all, return on asset (ROA) is a ratio used to measure how efficient a company generates profit using its assets, which is the invested capital. We noticed that HH’s ROA was increasing from 2006 to 2010. However, HH’s ROA for 2011 dropped dramatically from 18.41%(year

A. Current Ratio: The ability for a company to pay short term obligations is measured by this ratio. In 2011 Company G moved from 1.86 to 1.77. Compared to the 1.9 Home Center Retail Benchmarks industry ratio, the numbers are below standards. Current Ratio represents values above 2 quartile industry benchmarks data (1.4 to 2.1). Current Ratio represents a weakness for Company G.

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

Current Ratio: Current ratio helps the company assess its ability to use assets like cash, accounts receivable, inventory and the ability to pay short term liabilities as the accounts payable and wages. The ratio can be found by dividing the current assets /the current liabilities. Year 12 shows a ratio of 1.78 with year 11 a ratio of 1.86. Year 12 is down from year 11. The industry is 2.1 so year 12 has declined from the previous year and is near the lower quartile which means there is a weakness. There is a showing of declining trending.

Since an ROE of 21.48% equals the product of 4.41% and 4.87 (ROA and Equity Multiplier), it indicates that the firm is able to achieve such high ROE only through a high financial leverage.

The Return on Assets ratio is a basic measure of the efficiency with which TCI allocates and manages its resources (assets) to generate earnings. With a 20% projected increase in sales, for 1996, we calculated TCI’s ROA to be 12.95%, and 12.11% for 1997. Although this isn’t an extremely high ROA, TCI will be allocating its resources very wisely with the expansion of its central warehouse. If MidBank lends them the cash they need to complete this project, their central warehouse will be able to hold more tires for their increasing sales, which will then convert into profit. A true test of TCI’s ROA will be after 1998, when the warehouse is complete, so you can see just how well they can convert an investment into profit.

Return on Total Assets was 4.43% which is below five percent. That indicates that the company is not accurately converting its assets into profit. The total for Return on Stockholders’ Equity was 8.89%, however financial analysts prefer ROE to range between 15-20 %. The company’s low ROE indicates that the company is not generating profit with new investments. Lastly, Debt-to-Equity ratio for the company was 1.01 which indicates that investors and creditors are equally sharing assets. In the view of creditors, they see a high ratio as a risk factor because it can indicate that investors are not investing due to the company’s overall performance. The totals of these three ratios demonstrate that the company’s financial state is not as healthy as it should be.

The Total Asset Turnover or ROA (Return on Asset) lets us know how effectively assets generate revenue. Accounts Receivable Turnover tells us how effectively a company is collecting money from sales. As we can see, both companies are doing pretty comparable and so far, this does not explain the sudden cliff on Profit Margin.

Post-merger integration is the art of achieving the results dreamed of by investors. The merger made sense for all the right reasons—brand recognition, access to new customers, cost takeout, or global expansion—and the spreadsheets made it black and white—return on investment (ROI) in a year or less.

During this period, the Return on Assets increased from 5.7% in 2012 to 34.6% in 2013. This implies the number of cents earned on each dollar of assets increased from 2012 to 2013. This shows that the business has become more profitable. Equally, the Return on Equity also increased from 12.0% in 2012 to 46.5% in 2013. This similarly implies that the company in 2013 was more efficient in generating income from new investment. This, also can be attributed to the sale of the Digital Business Brand which enabled the company appraise its strategic plan.

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.