Starhill REIT: Financial Analysis

The fixed-asset turnover: This ratio measures a company's ability to generate net sales from fixed-asset investments

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.

Current Ratio: Current ratio measures the capability of the company in paying current liability. Higher the current ratio, better the liquidity position of the company. Generally, a current

A more tell tale sign is the quick ratio, or acid test, which has increased year after year. Debt to total assets has decreased over 5% since 2001, indicating less financing of current and long term debt and more company assets. Their cash debt coverage far surpasses the ideal 20%, indicating a high level of solvency with sufficient funds and assets to satisfy all debtors. Asset turnover has more or less maintained at right around 1.6, signifying a turnover rate of just less than 180 times per year.

Based on information given, we established the free cash flows from operations for Torrington, for the period 1999 to 2007. We made the assumption that net working capital was 7% of sales for Torrington, based on historic patterns. From this assumption, we found “Change in Net Working Capital” for the selected years. Next, we chose a value for “Capital Expenditures”, again based on historic patterns. From this we computed the “Free Cash Flows to the Firm”.

The productive assets of property, plant, and equipment changed dramatically in 1996 they were 5,581 to 2010 an increase to 21,706. In total current assets there was a increase in 1996 from 5,910 to in 2010 21,579. Another significant change is in long term debt in 1996 of 1,116 to in 2010 an increase to 14,041. Also an important figure to note is in the retained earning in 1996 they were 94% (15,127) to 2010 68%

Based on Next Annual Report and Account January (2011), the chief executive's review present the A New Normal of company overview, due to the changing consumer environment, Next PLC need to have New avenues of growth, and brand new way to control cost, also, it will be important that retailer have to generate the healthy cash flow with cautious management. Furthermore, enable to know how company efficiently use asset to generate revenue and whether there was improvement between 2010 and 2011, the activity ratios have to calculate out. The ROCE in 2010 and 2011 were 38.91%,41.79%, this number showed how profit generated by capital employed, and the growth figure of ROCE lead to level up efficiency asset used.((NEXT PLC, 2011 page43, 45) The figure for inventory turnover, receivable turnover, and payable turnover in 2010 and 2011 were 46.81 days, 54.98 days; 66.07days, 68.23 days; 83.36days,81.3days; respectively. (ibid) It is clearly show that the inventory and receivable turnover in 2010 was taken lesser day than 2011, in which means inventories took less day to sold out to costumer and the cash credit receive more faster than the 2011, besides, the payable turnover had longer period than 2011, it was also a good example to illustrate that there was more cash flow holding by company, and the overall image of these figure present that the resource had been

Reserve coverage ratio, despite the increase in loss reserves, is decreasing dramatically, from 213% in 2006 to 87% in June 2008, indicating an enormous increase in non-performing assets (NPA). The main reason on increase in NPAs the fact that high percentage (32.9%) of company’s total loans is Real Estate loans. This is the reason that company’s interest income has decreased despite the increase in loans made in 2008. Efficiency ratio is basically an operating expense margin measure, the lower the better. The above 60 percent efficiency ratio, 50 percent generally regarded as optimal, is an indicator of company's deteriorating performance.

Abbott’s fixed asset and total asset turnover ratios can tell us how well the firm uses its assets to generate revenue. The fixed asset ratio provides the proportion of sales to fixed assets and tells us how much revenue is

Lawsons 2010 and 2011 current ratio are above the industry average (1.8:1) however in 2012 the current ratio falls below the industry average at 1.55:1 and than again in 2013 to 1.02:1. This indicates that the company’s ability to pay its debts is

Current ratio measures whether a firm’s has enough current assets to meet the current liabilities. Current ratio is calculated dividing the current asset by current liabilities. The following figure represents the current ratio of both J Sainsbury Plc. and Tesco Plc.

Asset turnover ratio is also increasing in 1994. It shows that total assets are being efficiently used in producing revenues.

Another aspect to consider is the cash balance which was significantly lower by 34.6 % to the previous year. It is useful to consider the business context. From the same review, it could be noted that some capital expenditure took place which affected the cash level, the major one being the acquisition of Fudge which was mentioned above and an investment in a joint venture. Another key cash outlay was their contribution to the closed UK salary scheme during the de-risking exercise. The ratios are also impacted by the inclusion of borrowings in current liabilities which means the debt is repayable in the current year. If the ratios are recalculated by excluding the current debt, the current ratio would be more acceptable 1.70, a marginal increase from 2011. The acid test ratio excluding the borrowings is 0.95, a marginal decrease from 1.05. This is because for the acid test, current liabilities (excluding debt) have increased more than current assets (excluding inventory). Given the explanations stated, these ratios are probably good results but a trend analysis may shed more light on the ratios.

The current ratio is one of the most commonly cited financial ratios, measures the firm’s ability to meet its short-term obligations. Before HOYA merged with PENTAX, the current ratio for HOYA in year 2006 is 2.7 and in year 2007 is 3.5. After merger, the current ratio of HOYA decreases to 2.4 which is a big change before and after merger. Luckily in year 2009 the current ratio of HOYA increases to 2.9. The normal current ratio should more than 1.00 because that’s mean the current assets can cover the current liability.

The above ratios can be used to measure the efficiency of a firm’s investment policy. Burberry has a higher land, buildings and equipment to sales ratio as well as a higher depreciation to sales ratio. The higher the ratio of land, buildings and equipment to sales, the smaller the investment required to generate sales revenue and therefore the higher the profitability of the firm. Moreover, the ratio of depreciation to sales provides a measure of