Financial Ratios Essay

Introduction This is the report about financial ratios analysis of Pumpkin Patch Limited(PPL). This children’s clothing retail brand began with one store in 1991, now has about 600 employees across 43 stores in New Zealand and 1000 staff in 117 stores in Australia. However, it tripped into receivership recently. At the same time, Pumpkin Patch managing director Luke Bunt said “however, despite considerable efforts by the board and its management team, it has become evident that no solution is available

Liquidity Financial Ratio Review Exercise Understanding the meaning of financial ratios is imperative to different stakeholders both within and outside of a company. Management reviews different ratios to measure how effective the strategies used to run the business are within a given time period. Money Managers and other types of investors use ratios to determine investment strategies in different types of companies. The use of the ratios helps give a consistent look at different types of businesses

Quick Ratio Similar to the current ratio and net working capital calculations, the quick ratio measures a firm’s ability to pay its current liabilities with only quick assets (“Financial Ratio Analysis,” n.d.). Quick assets can be converted to cash within 90 days (“Financial Ratio Analysis,” n.d.). A stock is an example of a quick asset as it can be sold for cash when the market opens. To calculate the quick ratio, first we add cash, cash equivalents, short term investments and accounts receivables;

Liquidity ratios are defined as a class of financial metrics that is used to determine a company 's ability to pay off its short-terms debts obligations. Generally, the higher the value of the ratio, the larger the margin of safety that the company possesses to cover short-term debt (Liquidity Ratios, 2006). In simple terms this states for every dollar of current debt FedEx has, they have $1.96 to pay it off. Pertaining to FedEx, each of the ratios have significantly increased from the previous

set of financial statements, preferably for the pas few years so that historical trends can be obtained. Ratios are a way for anyone to get an idea of the financial performance of a company by using the information contained in the financial statements. Ratios are grouped into four basic categories, liquidity, activity, profitability, and financial leverage. This document will use a variety of these ratios to analyze the firm, Sample Company, as of December 31,2000. Financial Statement Ratios Profitability

Current Ratio: The point of the current ratio is to measure the ability of a company to pay off debt obligations. Netflix has a constant ratio hovering around 1.25-1.5 for the past five years (Appendix II, Exhibit 2). While this ratio would ideally be over 2.00, it does not indicate anything good or bad within the company. It is similar to this industry average, and is also similar to its Time Warner and slightly above Amazon. Because this ratio is similar to its competitors, investors should not

Utilizing financial ratios is the best way to learn about a company’s financial health and its potential. You can also use these ratios to compare several companies in the same industry to determine which company is the better investment. Six Flags has a current ratio of 1.29, so that means that they are more capable of paying their obligations with their assets than the other two amusements parks are. They also have the highest return on sales at 29% and this indicates that they are selling their

in manufacturing facilities located throughout the United States, Canada, Mexico and Europe. The company's financial ratios for 2004, 2005, and 2006 were analyzed and indicates that the company is not without problems. The current ratio for the company has been on a steady decline over the last three years. From the standpoint of a creditor, the reduction of the company's current ratio is not good as the company's short term liabilities is outgrowing its current assets. However, when you look

Answer 2 :- Calculations of ratios of financial statement of Santos Ltd. Particulars 2014 2013 PROFITABILITY: • Net Profit Margin (23.16) % 14.32 % • Gross Profit % 28.18 % 30.45 % • Return on Assets (6.74)% 4.71% • Earnings per share (95.6)￠ 53.3 ￠ EFFICIENCY: • Account Receivable Turnover 5.66 times 5.56 times • Inventory Turnover 6.72 times 6.80 times SHORT-TERM SOLVENCY: • Current Ratio 1.06 times 1.20 times • Acid Test 0.83 times 0.96 times • Cash Flow from Operations to Liabilities

Financial Statement Analysis Exercises (Chapter 2) 2-4. Consider the following potential events that might have taken place atVodafone Group Plc on 31 March, 2012. For each one, indicate which line items in Vodafone’s balance sheet would be affected and by how much. Also indicate the change to Vodafone’s book value of equity. (In all cases, ignore any tax consequences for simplicity.) a. b. A warehouse fire destroyed £50 million worth of uninsured inventory. c. Vodafone used £50million