S&S Air Case

800 Words Aug 29th, 2015 4 Pages
1. Calculate the ratios for S&S Air that are shown from the industry. | Light Airplane Industry Ratios | S&S Air Ratios | | Lower Quartile | Median | Upper quartile | | Current ratio | 0,5 | 1,43 | 1,89 | 1,45 | Quick ratio | 0,64 | 0,84 | 1,05 | 0,88 | Cash ratio | 0,08 | 0,21 | 0,39 | 0,169 | Total asset turnover | 0,68 | 0,85 | 1,28 | 1,30 | Inventory turnover | 4,89 | 6,15 | 10,89 | 12,10 | Receivables turnover | 6,27 | 9,82 | 11,51 | 13,08 | Total debt ratio | 0,31 | 0,52 | 0,61 | 0,39 | Debt-equity ratio | 0,58 | 1,08 | 1,56 | 0,63 | Equity multiplier | 1,58 | 2,08 | 2,56 | 1,63 | Times interest earned (TIE) | 5,18 | 8,06 | 9,83 | 5,63 | Cash coverage ratio | 5,84 | 8,43 | 10,27 | 7,44 | Profit …show more content…
Inventory turnover:
The inventory turnover is much higher than the one shown in the rest of the industries. This ratio shows that the inventory is well managed in compared to the competitors.

Receivables turnover:
The receivables turnover value is much higher than the ones in the industry. This is positive as it means that the gathering of accounts receivable is well managed.
Total debt ratio:
This ratio is positive, as it defines the proportion of a company’s assets that are financed by debt.
Debt-equity ratio:
Compared to the market, this value is positive as it means that the company is using more equity than debt to finance themselves.
Equity multiplier:
This ratio is similar to the total debt ratio. In this case is positive as it is somewhat lower than the industry values.
Times interest earned (TIE):
This value is not so positive, as it refers to the ease to pay its obligations.
Cash coverage ratio:
The cash coverage ratio is the ability to pay the interest of its debt. In this case it is positive, as it is slightly higher than the values in the light airplane industry.
Profit margin:
This ratio defines the operating efficiency of the company. In this case it is similar to the ones showed in the industry.
Return on assets (ROA):
The return on assets shows how efficient management is at using its assets to generate earnings. It is placed at the lower quartile so it is not a positive fact.
Return on equity (ROE):
It reveals how much profit a
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