Why Smith Enterprises Must Be A Good Long Term Investment For You

Nonetheless, as we all know the recession and economic changes affecting the women’s apparel industry during late 1980s and early 1990s. As a consequence, it is an indicator that Leslie Fay suspected to overstate its inventory in order to overstate its current asset. According to Account Receivable and Inventories two accounts, there is 10.8% increase in Leslie Fay’s current asset from 1987 (60.9%) to 1990 (71.7%). As far as I can see, Account Receivable and Inventories are the two main accounts which caused an unusual and inconsistent gain in total current asset in four years. Thirdly, there is unusual gain in PP&E account from 1990 (6.8%) to 1991 (9.9%). However, other accounts under Current Asset such as Inventories and Accounts Receivable started to decrease in 1990 and PP&E is the only account that increased 3.1% in one year. Also, I cannot find any equipment and estate purchased by Leslie Fay from 1990 to 1991. As a result, I suspect it might have fraud happened in Leslie Fay. Additionally, there is an unusual decrease in Long-term Debt account from 1990 to 1991. More specifically, the Long-term Debt decreased less than 10% from 1987 (38.2%) to 1990 (29.6%). While, it decreased 8.3% from 1990 (29.6%) to 1991 (21.3%) in one year. As far as I can see, this is an unusual and inconsistent decrease of Long-term Debt and it indicated Leslie Fay suspect to understate its

This type of report can be very beneficial in the management of a company. Balance sheets can best be reviewed by removing historical data via a Horizontal analysis. Assets, liabilities and owners’ equity can all be scrutinized and compared to determine if any damaging or constructive trends are apparent.

After reviewing the Balance sheet I have a concern regarding the Current and short term liabilities. Creditors/ trade payable is payment yet to be made for goods already received, if this continues to rise then it will effect the business profit and less stock will have to be ordered so repayments can be made. Bank overdrafts also continued to rise and in the long-term the business will be paying greater interest, which will again eat into the profit. Both increased quite a great deal from the last year-end. If this continues then the business will get into bad debts and owe too much that it will end up having to sale its assets to survive. Finally I can see that due to the above issues and other issues the net current assets/ working capital has decreased so therefore the business is less value then it was a year ago. If the business is worth £1 million now, this could soon decrease within another year.

BALANCE SHEET |Dec 1990 |Jan |Feb |Mar |Apr |May |June |July |Aug |Sept |Oct |Nov |Dec | |Cash |175 |556 |724 |175 |175 |175 |175 |175 |175 |175 |175 |175 |175 | |Accts receivable |2,628 |958 |234 |271 |270 |250 |250 |270 |1,603 |3,113 |3,580 |3,982 |3.063 | |Inventory |530 |948 |1,355 |1,749 |2,157 |2,564 |2,971 |3,365 |2,904 |2.314 |1,549 |697 |530 | |Net P/E |1,070 |1,070 |1,070 |1,070 |1,070 |1,070 |1,070 |1,070 |1,070 |1,070 |1,070 |1,070 |1,070 | |Total Assets |4,403 |3,533 |3,383 |3,265 |3,672 |4,059 |4,466

In 2016, the company has 8,970,824 US Dollars in Long Term Assets (Current Assets: 7,036,578), 146,947,000 US Dollars in profits, and 6,959,225 US Dollars in Total Liabilities (Current Liabilities: 2,689,770). The problem with Labilities is that it is debt that has to be paid off over a certain period of time and in this case for current liabilities, it is a year. Labilities are expected to be paid off with cash but that’s a problem for Cabela’s. Cabela’s has a cash flow of -51,241,000 US Dollars and a long term debt value of 3,158,085 US Dollars which means cash is limited for Cabela’s. The current Ratio is at 2.616 which means the company is not managing its assets a properly and in turn could be having financial issues. [2] What is also not a good sign is the debt to equity ratio is 3.460 and this value is a sign that the Cabela’s has a high debt level and is having financial troubles. [3] Then the Return on Sales Ratio is .04 or 4% which terrible because this percent should be over 10%. Another sign that a company is having trouble is that the Acid Test Ratio is 2.30 because the ratio value should never be over 1. These troubling financial records shows that Cabela’s is having troubles but the real certain are in the direction of the

The balance sheet (BS) is significant to a business due to its ability to provide a “snapshot” of a company’s assets and liabilities at any given time. This financial document is a cursory representation of a business’s health. The use of comparative BS whether it be yearly, quarterly, or monthly provides the interested parties a tool to observe trends that are positive, negative, or neutral to a company’s financial health (Finkler, Jones, and Koyner,2013) .

The third reason would be the book value for per share of common stock. Currently the company has a ratio of 3.30 compared to the previous year of 3.43. The decrease in the ratio denotes the company is in a less favorable status because it illustrates how much the stockholders would receive for their share of stock if the company would

Discuss the trend for each ratio and what it tells you about the organization’s financial health.

Financial ratios play a key role in determining how a company is doing financially either for the good or the bad. Financial Ratios can be used internally or externally to determine how financially stable a company is. For this assignment we will use three common ratios to determine how financially stable and how Under Armour is over the last three years.

Riodan’s Inventory accounts for a large share of its current assets (54%). On the surface this may represent a weakness however the company has an inventory turn of 5.35 (cost of goods sold annually/inventory) which means the company goes though its inventory 5.35 times per year or every 68 days. Riodan’s products are not perishable and enjoy a very long shelf life so this turnover rate of relatively good. This relatively high turnover rate allows for it to maintain relatively low cash balances as it can raise cash quickly from sale of inventory. This is reflected in the high balance of the accounts receivable.

This report examined the performance of Premier Investment Limited for 2012. Firstly, the income statement and the balance sheet were recast and justified using additional information available in

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

Aurora was a unattractive company because of their financial performance and that’s because a lot of competition arose that really hurt Aurora. We try to analysis the period of 1999 through 2002. We saw that the company profitability have worsened with every year that passed, net sales have been declining by 15% and profit margins and ROA were always in the negative in exhibit 1. The raw material cost of the net sales have been declining and the cost of conversion is affecting the bottom line in exhibit1. The company does not have the ability to meet its current obligations with just cash or with cash equivalents. That is because the firm’s current assets are predominantly account receivables and inventories. Aurora and other companies in the

Jones over forecasts his inventory and has a low inventory turnover ratio. This drastically increases his accounts payable, as he isn’t able to pay due to low cash inflow. His account’s payable increased by nearly 9 percent in 2006. Nearly half of his current assets are in inventory. Also Jones isn’t able to take advantage of the cash discounts offered by his suppliers due to his slow cash collection process. In order to perform well, the company must improve its inventory system and its cash collection policies.

As the textbook states a vertical analysis is “An analysis of a financial statement that reveals the relationship of each statement item to its base amount, which is the 100% figure”. In the balance sheet it reports on the assets, liabilities, and stockholders’ equity of the business as of a specific date. Liabilities are debts that are owed to creditors. Stockholder’s equity is a corporation’s equity that includes paid in capital and retained earnings. For Yahoo over the last five years kept a pretty steady amount of assets at around fifteen billion. There was an increase in the year 2012 to 17.1 billion. Last year 2013 it lowered to 16.8 billion in assets. Their debt has increased from 40 million in 2010 to 1.1 billion in 2013. In the last four years Yahoo has lower their amount of liabilities with a slight increase last year. In the year of 2010 they had 1.6 billion dollars in liabilities, they have decreased their liabilities to 1.3 billion dollars in the ending of 2013. The stockholder equity increased as well, back in 2010 it was at 14.9 billion. It had an increase to 14.5 billion in 2012, but a slight drop happened in 2013 ending at 13 billion dollars. A income statement reports the net income or net loss for