Pecunious Products, Inc.'s financial results for the past three years are summarized below: Year 3 128.0 Year 2 115.0 Year 1 100.0 Sales trend Current ratio 2.5 2.3 2.2 Acid-test ratio 0.8 0.9 1.1 Accounts receivable turnover 9.4 10.6 12.5 Inventory turnover Dividend yield Dividend payout ratio 6.5 7.2 8.0 7.1% 6.5% 5.8% 40% 50% 60% Return on total assets 12.5% 11.0% 9.5% Return on equity Dividends paid per share 14.0% 10.0% 7.8% P1.50 P1.50 P1.50 Required: Based on the ratios presented above, discuss your analysis of Pecunious' financial results with respect to its: a. Liquidity; b. Asset management; c. Profitability; and d. Market performance
Pecunious Products, Inc.'s financial results for the past three years are summarized below: Year 3 128.0 Year 2 115.0 Year 1 100.0 Sales trend Current ratio 2.5 2.3 2.2 Acid-test ratio 0.8 0.9 1.1 Accounts receivable turnover 9.4 10.6 12.5 Inventory turnover Dividend yield Dividend payout ratio 6.5 7.2 8.0 7.1% 6.5% 5.8% 40% 50% 60% Return on total assets 12.5% 11.0% 9.5% Return on equity Dividends paid per share 14.0% 10.0% 7.8% P1.50 P1.50 P1.50 Required: Based on the ratios presented above, discuss your analysis of Pecunious' financial results with respect to its: a. Liquidity; b. Asset management; c. Profitability; and d. Market performance
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter5: Sales And Receivables
Section: Chapter Questions
Problem 87APSA
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