Write report on liquidity, profitability, growth, solvency, Leverage and operational performance of National Company. Comment on overall financial position and financial health of the business. Identify problems and recommend possible solutions, if historical ratios of company are Ratios 2017 2018 2019 Current Ratio 1.4 1.5 1.6 Acid Test Ratio 0.85 0.74 0.63 Asset Turnover Ratio 4 times 3.2 2.5 Inventory Turnover Ratio 6 times 5.5 5 Collection Period 6 times 5.5 5 Account payable turnover 8 times 10 times 12 times Total Debt to equity Ratio 1.38 1.61 1.91 Interest cover 5 4 3.5 Gross Profit Ratio 20% 22% 23% Net Profit Margin 8.5% 6.7% 3.8% Return on Equity 20% 21% 24% Sales Growth Rate 8% 5% 2% P/E Ratio 10 9 8 Fixed Asset Utilization Ratio 2 1.7 1.4
Write report on liquidity, profitability, growth, solvency, Leverage and operational performance of National Company. Comment on overall financial position and financial health of the business. Identify problems and recommend possible solutions, if historical ratios of company are Ratios 2017 2018 2019 Current Ratio 1.4 1.5 1.6 Acid Test Ratio 0.85 0.74 0.63 Asset Turnover Ratio 4 times 3.2 2.5 Inventory Turnover Ratio 6 times 5.5 5 Collection Period 6 times 5.5 5 Account payable turnover 8 times 10 times 12 times Total Debt to equity Ratio 1.38 1.61 1.91 Interest cover 5 4 3.5 Gross Profit Ratio 20% 22% 23% Net Profit Margin 8.5% 6.7% 3.8% Return on Equity 20% 21% 24% Sales Growth Rate 8% 5% 2% P/E Ratio 10 9 8 Fixed Asset Utilization Ratio 2 1.7 1.4
College Accounting, Chapters 1-27
23rd Edition
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:HEINTZ, James A.
Chapter24: Analysis Of Financial Statements
Section: Chapter Questions
Problem 3SEA: ANALY SIS OF PROFITABILITY Based on the financial statement data in Exercise 24-1A, compute the...
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Write report on liquidity, profitability, growth, solvency, Leverage and operational performance of National Company. Comment on overall financial position and financial health of the business. Identify problems and recommend possible solutions, if historical ratios of company are
|
Ratios |
2017 |
2018 |
2019 |
|
Current Ratio |
1.4 |
1.5 |
1.6 |
|
Acid Test Ratio |
0.85 |
0.74 |
0.63 |
|
Asset Turnover Ratio |
4 times |
3.2 |
2.5 |
|
Inventory Turnover Ratio |
6 times |
5.5 |
5 |
|
Collection Period |
6 times |
5.5 |
5 |
|
Account payable turnover |
8 times |
10 times |
12 times |
|
Total Debt to equity Ratio |
1.38 |
1.61 |
1.91 |
|
Interest cover |
5 |
4 |
3.5 |
|
Gross Profit Ratio |
20% |
22% |
23% |
|
Net Profit Margin |
8.5% |
6.7% |
3.8% |
|
|
20% |
21% |
24% |
|
Sales Growth Rate |
8% |
5% |
2% |
|
P/E Ratio |
10 |
9 |
8 |
|
Fixed Asset Utilization Ratio |
2 |
1.7 |
1.4
|
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