Startegic Analysis (Sherwin Williams) Essay

Be Our Guest’s balance sheet shows good signs of liquidity. Current Ratios for the past four years have remained above 1 proving that the company can handle its current liabilities. The current ratios are not extremely high (19941.27, 1995- 2.17, 1996- 1.15 and 1997- 1.16), but they can cover the current liabilities. It is important to note that the company is operating on a thin line because the current assets are barely covering the current liabilities. This is particularly unpleasant because we are dealing with a company operating in a seasonal business. It is a concern that the current ratio slightly eroded after 1995, and this is primarily due to Be Our Guest converting the bank line into long term debt in

The current cash debt ratio only measures the ability of a firm 's cash, along with investments easily converted into cash, to pay its short-term obligations. In 2007, the company has a current cash debt ratio greater than 1 and is in better financial shape than in 2006, when the ratio was less than 1.

ACC/291 March 25,2012   Liquidity Ratios Current Ratio: Current Assets/Current Liabilities 2005 $14,555,092/ $6,974,752= 2.09:1 2004 $14,643,456/ $6,029,696=2.43:1 Acid Test Ratio: Cash+ Short-Term Investments + Receivables (Net)/ Current Liabilities 2005 $305,563 + $283,583 +$6,133,663/ $6,974,752= .96:1 2004 $357,216 + $133,504 + $5,775,104/ $6,029,696=1.04:1 Receivables Turnover: Net Credit Sales/ Average Net Receivables 2005 $50,823,685/ ($6,133,663 + 5,775,104/2) $50,823,685/ $5,954,384= 8.54 times 2004 $46,044,288/($5,775,104+6,569,344/2) $46,044,288/ $6,172,224=7,46 times Inventory Turnover: Cost of Goods Sold/ Average Inventory 2005 $42,037,624/ ($7,850,970+$7,854,112/2) $42,037,624/$7,852,541=5.35 times

Two-year decrease of liquidity measures including current ratio and quick ratio reveals the problems concerning company’s short-term solvency and liquidity. Butler Lumber Company’s current ratio decreased to 145.05% in 1990 from the level of 180.00% in 1988. The same decrease happened to quick ratio (decreased from 88.08% in 1988 to 66.92% in 1990). As the short-term lender, Northrop National Bank should have noticed that Butler Lumber Company’s ability to pay its bills over the short run without undue press needs to be carefully examined. The decrease of current ratio also implies the decreasing level of company’s net working capital, which is another sign of lower level of liquidity.

HH’s long term debt/asset ratio was decreasing from 2006 to 2010 and goes up a little bit to 14.82% as shown on the data. However, the total debt ratio were all time above 50% except year 2010. At the end of 2011, HH’s total debt ratio is 57.54% while the long term debt/asset ratio is 14.82%. This tells us that HH has a larger portion in short term debts/ liabilities than long term debts. And as we can see from the consolidated balance sheet,

Lowe’s Companies, Inc., is a $26.5 billion company that employs 122,000 people. It is the world’s second largest home improvement retailer and the 14th largest retailer in the United States as well as the 30th worldwide. Lowe’s owns 854 stores in 44 states and serves eight million do-it-yourself and commercial customers weekly. Headquartered in Wilkesboro, N.C., Lowe’s has been in business for 57 years and publicly held for 41 with stock listed on the New York Stock Exchange under the symbol LOW. The company offers products and services in home improvement, home décor, home maintenance, home repair and remodeling and lawn and garden.

First of which, is the current ratio. It has been rapidly declining since 2000. To me this indicates that there is a liquidity issue. Each year their trade debt increase exceeds the increase of net income for the company. As a result, the working capital has taken a nosedive from $58,650 in 2002 to only $5,466 in 2003.

The Company had $1.55 of current assets to repay each $1 in liabilities in 2014, dropping to $0.94 per $1 in 2015 respectively. The decrease in current ratio occurred due to the decrease in current assets and increase in current liabilities from 2014 to 2015. It is important to recognize that in 2015, SCC did not have enough current assets to pay for its current liabilities. The note of financial statements attributed this to the increase in trades payable and accrued expenses from the expansion plan of SCC, leading to

      There were an increased number of contractor sales and architectural paints along with related supplies. An increase in Do-It-Yourself customers has also helped with strong sales growth. The increase in the Do-It-Yourself market resulted in higher sales of paints, wood care products and aerosol products. The services of professional painting contractors were in high demand, and those customers shop at Sherwin-Williams paint stores. These customers continue to shop at the paint stores because of Sherwin-Williams' quality products and services which have made their business more successful. Net sales for their Paint Stores segment increased by 14.6 percent

According to the Allison Transmission announces third quarter results, Net Sales $493 million, Adjusted Net Income $123 million, Adjusted EBITDA $174 million, Adjusted Free Cash Flow $142 million or $0.81 per Diluted Share - Earnings of $0.32 per Diluted Share excluding Environmental Remediation Charge. Therefore, the company liquid after adjusted was $142 million, and the total current liabilities were $ 316 million. So the company liquid cannot comfortably pay its current liabilities. The current ratio is a liquidity ratio that measures a company's ability to pay short-term obligations. It is calculated as a company's total current assets divides by its total current liabilities. Allison Transmission Holdings Inc's current ratio for the quarter

The quick ratio is a more rigorous test for the company’s ability to meet its short-term debts than current ratio because inventory was eliminated from current assets. The quick ratio for PPL indicates serious issues as it has decreased from 0.31 in 2012 to 0.07 in 2016. The low quick ratio implies that a considerable portion of the current assets of the company is tied up as part of its inventory (Bragg, 2007), which means that the lower level of quick liquidity ratio indicates a high level of financial risk. The balance sheet for PPL (PPL, 2016) revealed that, particularly in 2016, the inventory accounted for 90% of the current assets. Therefore, the company must improve its working capital to meet its near term current liabilities.

The liquidity ratios of the firm are slightly below the industry averages. This is due to inventory and accounts receivable making up a significantly larger portion of the current assets than cash and marketable securities. This may be indicative of a problem with inventory management and/or collection on accounts.

The company is in a position to meet their current liabilities using the current available assets both in the two years. The point of concern is that both the current and the acid test ratios have decreased comparing the ratios in 2014 and 2015. The point of concern also is that the firm hasn't hit the recommended current ratio of 1:2 (Penman & Penman, 2001).

Balance Sheet: Assets, such as Cash and Cash equivalents are up over last year by $20.72 million dollars, whereas Short Term Investments where 0 at the end of 2013 they were slightly up to $1.12 by January 3, 2015. Other Assets shows a drop of $8.26 million dollars, mostly in Property, Plant and Equipment. Based on the 10-K report the balance sheet was in the thousands other web based financial reporting sites show the numbers to be in the millions. Upon further review of the Balance Sheet from the financial website “Watch” the break down in Property, Plant and Equipment shows the biggest difference in the Accumulated Depreciation. (Market Watch) The Vertical Ratio for 2014 Total Current Assets is 3% of the Total Assets and in 2013 was also 3%. The Horizontal Ratio for Total Asset were 37% reflecting a change from 2014 at $212.05 and 2013 $195.61 signaling a significant increase in 2014. The 2015 financial were not completed at the time of this report but the

FPL’s liquidity dropped from 1.004 in 1992 to 0.681 in 1993 as the growth rate of current assets was lower than that of current liabilities. The main contributions of the increase in current liabilities were significant increases in notes payable-commercial paper and deferred clause revenues. Equity increased significantly while there was a slight increase in assets and a small decrease in liabilities that debt ratio, debt to equity ratio and equity multiplier dropped by 0.2, 1, and 1 respectively. This showed that the firm’s risk decreased