Thursday, April 18, 2019
Produce a table of four profitability ratios, four efficiency ratios Assignment
scram a table of four profitability ratios, four efficiency ratios and two luculentity ratios for each green light below. Written Report - Assignment ExampleDaley has a current ratio of 1.3 1 which is lower than Maceys despite having both, more current additions and liabilities. It is however, still enough to meet its pitiful term obligations.Both companies collapse a good liquidity position, which prevents them from having to sell get through their inventory in order to pay their short term debts. Without liquidating their inventories, both companies can easily manage their short term obligations through their most liquid current assets.Daley has a go inventory turnover ratio which indicates that it takes less time to sell off its finished products. With less cash tied up in inventory and considerably lower comprise of goods sold, Daley takes approximately 10 days less than Macey to convert its goods into sales.Customers of Daley are taking twice as big to repay the company which means that the receivable collection is not timely. Compared to Macey, Daley has a lot tied up in the form of receivables, more than 1.5 times as much as Macey. Its sales are alike approximately $300 million less than Maceys. Maceys receivable collection seems to be within their modal(a) length of time taken to recover cash. These figures indicate that both the firms deal in some crystalize of fast moving consumer goods to able to recover cash within 2-3 days.Daleys utilization of fixed assets is better than Maceys with a ratio of 8.9 times. For every $1 invested in fixed assets, Daley is making $8.9 in sales. On the other hand, Macey is making only $5.5 in sales for every $1 invested in fixed assets. Macey has high sales than Daley but it also has approximately twice the amount of fixed assets. This signifies that Macey has too much invested in fixed assets.Daley, despite having higher current assets and lower sales than Maceys, has a better total asset turnover. Maceys investment in fixed asset seems to be unnecessary and is affecting its ability to founder sufficient sales with regards to the amount of fixed assets
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