Report on the Financial Strengths and Weaknesses of Arapahoe-Goldstein Supermarkets, Inc.
Adaptation is essential to survival. Humans as a species share this primal knowledge of Social Darwinism and have applied it fittingly to our societal interactions and business endeavors. People, as well as companies are subject to its whims and as such must either adapt or fail. However, a company cannot know its standing or how to better its chances of survival in a cutthroat, profit-oriented business world without a thorough understanding of its own abilities and evolutionary advantages (or lack thereof). Therefore, it is necessary to periodically analyze the financial strengths and weaknesses of a company in order to ensure that it is doing
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An ad campaign or promotions may increase sales and the retiring of any unnecessary assets could decrease average total assets. If you are able to accomplish either of these, then your Total Asset Turnover and resultantly your ROA will increase. In this analysis of profitability, it is also worth mentioning a ratio known as Accounts Receivable Turnover. This ratio represents the number of times accounts receivables turnover in a year, or rather how often the company collects on credit. Your accounts receivable turnover ratio was 466.67 in 2009 and 570.00 in 2010 compared with industry norms of 101.6 and 92.8 respectively. Due to the quick turnover of accounts receivable (also partially due to the fact that many transactions are in cash), your company may not be earning as much interest as it has the potential to. One way of solving this issue would be to lower the speed at which you collect on accounts (which you may have to take up with third-party credit collectors), thereby increasing interest revenue and profitability. In summary, your company has increased profitability significantly over the previous two years, but must continue to increase it in order to stay competitive by either raising prices, increasing sales, decreasing average total assets, or slowing credit collection. The second facet of a company to analyze in
In accounting there is much to be learned, about the financial aspects of a business. In the past five weeks I have learned the importance of financial reports and how they relate to the success of an establishment. These reports may include balance sheets and income statements, which help accountants and the public grasp the overall financial condition of a company. The information in these reports is really significant to, managers, owners, employees, and investors. Managers of a business can take and deduce financial
The approaches mentioned above can be used to analyze any company. The company can be a startup company or a big established company such as Apple, Google, IBM, etc. We use Porter’s five-forces model to evaluate if the company is profitable or not.
To understand whether company premise is plausible, one must first under the facets of commercial impracticability and specific performance.
An assessment of the company’s financial statements will highlight the firm’s management of its risk and opportunities.
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.
However, two known authors in this field of study believe that companies with low business risk obtains factors of production at a lower cost which may also pave to the ability of the firm to operate more efficiently (Amit & Wernerfet, 1990). Therefore, many stockholders faced a high of uncertainty; this is because some companies do not have the financial strengths to cover its debts that even may result to bankruptcy.
The company’s ability to generate profitability might not be constant and subject to a lot of factors.
The company’s debt ratios are 54.5% in 1988, 58.69% in 1989, 62.7% in 1990, and 67.37% in 1991. What this means is that the company is increasing its financial risk by taking on more leverage. The company has been taking an extensive amount of purchasing over the past couple of years, which could be the reason as to why net income has not grown much beyond several thousands of dollars. One could argue that the company is trying to expand its inventory to help accumulate future sales. But another problem is that the company’s
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.
The organization that I have chosen for the purpose of this corporate finance analysis is Wal-Mart. As is well known, Wal-Mart is the global market leader of
Stakeholders include but are not limited to employees, investors, and lenders. Therefore, to have a well-informed and well-rounded opinion, it helps to have accurate and up to date financial statements and ratio distribution of the company’s revenue. With the statements, it not only shows the current position of the company but gives insight to determine the best decisions in the running of the company. In regards to lenders, financial statements are the antithesis of the lending criteria used to calculate any monies the company may or may not receive. This calculation is important in estimating the average amount of money that they can lend the organization, and the amount can be paid after a certain period taking into account the rate of interests (Cummings & Worley, 2009).
This paper reviews the Cash Flow Statements of Yum Brands, Inc., Panera Bread, and Starbucks documented by case study 10-10 in our textbook for the purpose of analyzing financial health based on cash flow data. (Gibson, 2013).
Landry’s has become a successful company over the years because the customers enjoy the specialty items that they serve on their menu. It has become a company that we enjoy taking our families out to dinner, celebrating birthday parties and certain special events. However, this paper will complete the financial analysis for the reported years of 2002 and 2003. Upon review of the financial statements will find out the financial performance of Landry’s and show the analysis. The ratio analysis of Landry’s will be reviewed as well and in details discussed from their
All managers need to understand where value comes from in their firm. The purpose of this analysis is to identify the financial strategy and performance of this particular publicly traded company. The process of understanding the risk and profitability of a company by analyzing reported financial info, especially annual and quarterly reports are vital to identifying the company’s overall financial performance. I wanted to analyze Coca Cola because the company has so much history and is one of the most recognizable brands in the world. I have always enjoyed researching food and beverage companies
of the key issues result from John’s inability to comprehend the difference between sales representative and a sales manager. He was overly enthusiastic about his position and disregarded Phil Jackson’s tips on how to be successful as a sales manager. Sales managers must be multi-taskers who plan, organize and lead the functions of all customer contact and ensures that these methods of contact maximize the profit and sales goals of the company which hires them. A salesperson is responsible only for his/her own territory – a sales manager is responsible for the entire sales force and their productivity and revenue that