In this task i will be stating the different types of ratios and calculating them for the each type.
Solvency ratios
Solvency ratios is used to measure the ability for a business to meet its long term debts. The formula for Solvency ratio = (After Tax Net Profit + Depreciation) / Total liabilities. This formula calculates whether a business cash flow is sufficient enough to meet its short and long term liabilities.
Current ratio
Current ratio is a liquidity ratio that measures a business’s ability to pay short term liabilities with their current assets. The formula for current ratio is : Current Assets / current liabilities
The current ratio for Domestic Dog Homes is £40700 / £95000 which equals to 0.43 : 1. This is good as Domestic Dog
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This shows the income of the sales revenue which is being made by the business. Also it analyses how well a business uses its assets and liabilities …show more content…
The stock turnover for Domestic Dog Homes is £525,000 / £19,700 = 13. This means that Domestic Dog Homes must reorder their stock every 13 days.
Debtor collection period
The debtor collection period is the time taken for a business to collect its trade debts. It is the number of days the the debtor has to pay back the business who they we money to. The formula for debtor collection period is debtor / sales revenue multiplied by 365.
The debtor collection period for Domestic Dog Homes is £9,500 /£220,000 x 365 = 15.8. This means that the debtors have 15 days to pay back the money they owe to Domestic Dog Homes.
Asset turnover
Asset turnover shows how the business uses the assets it has. There are two types of asset turnovers which are; receivables turnover and inventory ratio. The formula for receivables turnover is annual credit sales ÷ accounts receivable. The formula for asset turnover is sales revenue ÷ assets. The asset turnover for Domestic Dog Homes is £525,000 ÷ £54,300 =
Total asset turnover : This ratio measures the efficiency of a company’s use of its assets
Asset turnover depicts investment efficiency, because it shows how many sales dollars are generated for every dollar invested in the company’s assets. Lowe’s had relatively lower asset turnover ratios than Home Depot because their recent investment in PP&E.
According to petfinder.com, during your first year owning a dog you may spend up to $10,350. Before buying a dog, people should review the financial commitment it takes. Cost wise, dogs can take a big chunk of money from your bank account. Dogs can be expensive because of vet and medical bills, grooming prices, and food and water are pricy necessities.
For millions of years dogs have remained a constant companion of man. Bred from the aggressive and formidable Gray Wolf tens of thousands of years ago the domestic dog now lives in many homes across the world. Where in the far distant past the domestic dog was bred as a guard animal, a beast of burden, and even a food source the dogs of today are bred for a far more endearing purpose-companionship and love. Finding a pet dog that is more of a joy than a chore is necessary when asking: How much is that puppy in the window?
The current ratio measures a company’s ability to pay short-term and long-term obligations. This number is found by taking a company’s current assets and dividing it by current liabilities. Below are Walmart, Inc.’s and Costco Wholesale Corporation’s current ratio for the 2015 and 2016 fiscal year end. The industry average is also included for comparison.
The cost of a service dog can be very expensive, if not obtained by an organization that receives donations and helps the family out. The average annual cost to maintain a dog was $1307, with a range of $195-$5134 (Davis 134). The daily routine changes in some of the families affected the dogs negatively. The dog would have bathroom accidents in the home, which were frowned upon by the family. The stress of the day to day activities with the child would be too much for the dog to handle at times, fatigue and attitude changes were apparent. The majority of problems faced with a service dog can be eliminated, with a set routine and normal breaks given to the dog.
The U.S. owned-dog population is 78.2 million and it is growing steadily. With a population so large it is no surprise that the pet
The average American spends on average about 1,270 dollars on their dog for the first year of ownership (moneyunder30.com). That price may rise if your dog needs special care, or there is an emergency that happens to your dog. This is a major fact that people who might buy a dog should consider. Dogs can be cuddly and loyal friends, but they come at a price. Some of the reasons dogs can be expensive are because of medical expenses, grooming, and the price of food and water.
Are dogs considered a part of household good and therefore have a right to be divided or in someone’s possession?
Conclusion: Overall it seems that Domestic Dog Homes is financially in an unstable state as it is either performing reasonably well in order to survive or it is not doing so well is particular areas, e.g. current ratio and asset turnover.
Current ratio is a financial ratio that measures whether or not a firm has resources to pay its debts over the next 12 months. Long term solvency ratio is a useful calculation for assessing the long term financial viability of an organization. The
A third activity ratio is the inventory turnover ratio, which indicates the effectiveness with which the company is employing inventory. Since inventory is recorded on the balance sheet at cost (not at its sales value), it is advisable to use cost of goods sold as the measure of activity. The inventory turnover figure is calculated by dividing cost of goods sold by inventory:
Total asset turnover is probably use in evaluate how effective for a corporation to take advantage from its assets in generating revenues (Tugas, 2012). For Matthew Corporation, the total asset turnover is considered as improving which mean there is only little difference and Matthew Corporation still manage to utilize its assets quite
Current Ratio: It states the relationship between Current Asset and Current Liability of a company.
Please see table A & B in the supplementary section for a complete chart of all financial ratios and calculations: