Analyze the cases in the document attached and prosose solutions 1.Using the ratios and information given below for LDC Company, analyze theshort-term liquidity and operating efficiency of the firm.2012.702011.80Current ratioQuick ratioCash flow liquidity ratioAverage collection periodDays inventory heldDays payable outstandingCash conversion cycleFixed asset turnoverTotal asset turnover.6255.711.0230 days10 days91days30 days12 days98 days(51 days) (56 days)29 times 27 times21 times$1,254$8,61120 timesCash flow from operations (in millions)Net sales (in millions)$613$9,1442. Using the ratios and information given for FABulous Things.com, an Internetretailer, analyze the short-term liquidity and operating efficiency of the firm as of2012.Financial ratiosLiquidityCurrent (times)Quick (times)Cash flow liquidity (times)Average collection periodDays inventory heldDays payable outstandingCash conversion cycleActivityFixed asset turnover (times)Total asset tumover (times)Other information201220111.481.071.329 days35 days85 days(41 days) (39 day3)1.351.021.239 days27 days75 days30.4528.252.422.63

To check short term liquidity: Current ratio and liquid ratio are used. To check operating…

1.Using the ratios and information given below for LDC Company, analyze the short-term liquidity and operating efficiency of the firm. 2012 70 2011 80 .71 1.02 Current ratio Quick ratio Cash flow liquidity ratio Average collection period Days inventory held Days payable outstanding Cash conversion cycle Fixed asset turmover Total asset turnover Cash flow from operations (in millions) Net sales (in millions) .62 55 30 days 30 days 12 days 98 days (51 days) (56 days) 27 times 21 times $1,254 $8,611 10 days 91days 29 times 20 times $613 $9,144

1.Using the ratios and information given below for LDC Company, analyze the short-term liquidity and operating efficiency of the firm. 2012 70 2011 80 .71 1.02 Current ratio Quick ratio Cash flow liquidity ratio Average collection period Days inventory held Days payable outstanding Cash conversion cycle Fixed asset turmover Total asset turnover Cash flow from operations (in millions) Net sales (in millions) .62 55 30 days 30 days 12 days 98 days (51 days) (56 days) 27 times 21 times $1,254 $8,611 10 days 91days 29 times 20 times $613 $9,144

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter3: Evaluation Of Financial Performance

Section: Chapter Questions

Problem 10P

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