Base on the financial ratios of company A, what is your recommendations and conclusion for company A. COMPANY ARATIO20192018Liquidity1 Current Ratio0.671.072 Quick Ratio0.531.09Profitability3 ROE4 ROA6.74%8.65%3.43%5.08%5 GPM6 OPM7 NPMLeverage8 Debt Ratio9 Debt to Equity Ratio10 Time Interest Earned Ra17.25%18.78%3.62%5.74%3.77%4.99%0.720.671.421.153.984.94Efficiency11 A/R Turnover Ratio12 Average Collection Perid13 Inventory Turnover Ratid14 Average Age of Inventor15 Accounts Payable Ratio16 Average Age of Payable17 Operating Cycle18 Cash Conversion Cycle19 Total Asset Turnover Rat20 Fixed Asset Turnover Ra36.1140.3410916.0016.93222110.866.9133523230-1-221.061.346.066.78

Ratio analysis is the analysis in which ratios are compared for different periods and companies.

COMPANY A RATIO 2019 2018 Liquidity 1 Current Ratio 2 Quick Ratio Profitability 3 ROE 4 ROA 0.67 1.07 0.53 1.09 6.74% 8.65% 5.08% 18.78% 3.43% 5 GPM 17.25% 6 OPM 7 NPM 5.74% 4.99% 3.62% 3.77% Leverage 8 Debt Ratio 9 Debt to Equity Ratio 10 Time Interest Earned Ra Efficiency 11 A/R Turnover Ratio 12 Average Collection Perid 13 Inventory Turnover Ratid 14 Average Age of Inventor 15 Accounts Payable Ratio 16 Average Age of Payable 17 Operating Cycle 0.72 0.67 1.42 1.15 3.98 4.94 36.11 40.34 10 9 16.00 16.93 22 21 10.86 6.91 33 52 32 30 18 Cash Conversion Cycle -1 -22 19 Total Asset Turnover Ra 20 Fixed Asset Turnover Ra 1.06 1.34 6.06 6.78

COMPANY A RATIO 2019 2018 Liquidity 1 Current Ratio 2 Quick Ratio Profitability 3 ROE 4 ROA 0.67 1.07 0.53 1.09 6.74% 8.65% 5.08% 18.78% 3.43% 5 GPM 17.25% 6 OPM 7 NPM 5.74% 4.99% 3.62% 3.77% Leverage 8 Debt Ratio 9 Debt to Equity Ratio 10 Time Interest Earned Ra Efficiency 11 A/R Turnover Ratio 12 Average Collection Perid 13 Inventory Turnover Ratid 14 Average Age of Inventor 15 Accounts Payable Ratio 16 Average Age of Payable 17 Operating Cycle 0.72 0.67 1.42 1.15 3.98 4.94 36.11 40.34 10 9 16.00 16.93 22 21 10.86 6.91 33 52 32 30 18 Cash Conversion Cycle -1 -22 19 Total Asset Turnover Ra 20 Fixed Asset Turnover Ra 1.06 1.34 6.06 6.78

Financial & Managerial Accounting

13th Edition

ISBN:9781285866307

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 15.17EX: Profitability ratios The following selected data were taken from the financial statements of...

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