Business

Chapter 4 Case Study Questions Arthur Cunhs D Leon, Inc. Part II January 28, 2011 A. wherefore are ratios exerciseful? What are the five major ratios? The persona of ratios are important to let a social club actualize out were its stand financially against other(a) competitors. Also, ratios can be utilize to let investors know were a company stands financially, and say organisational improvements with their finances. There are five major ratios Liquidy ratios, Asset cogitate ratios, Debt management ratios, Profitability ratios, and Market value ratios. B. judge DLeons 2009 percentage point and restless ratios based on projected balance static gear and income statement data. What can you say about companys fluidity fulfill in 2007, in 2008 and as projected in 2009? We a good deal think of ratios as beingness useful (1) managers to help return the business, (2) bankers for credit analysis, and (3) to stockholders for stock valuation. Would theses anti thetical types of analyst have an passable interest in company liquidy ratios. The stream ratio 2,680,112 sure liabilites1,144, 800=2.34 and the degenerate ratio Current assets -Inventories 2,680,112-1,716,480/ Current liabilities 1,144,800=963,632/1,144,800=0.

842x The companys current and quick ratios are identical to its 2007current and quick ratios, and they have improved from their 2008 levels. However, two the current ratios are easy below the industry averages. C. Calculate the 2009 inventory derangement, days sales (DSO), fixed assets turnover, and come up assets turnover. How does DLeon e njoyment of assets stack up against other fi! rms in the industry The instrument turnover09= gross revenue/Inventory= $7,035,600/$1,716,480 = 4.10´. DSO09= Receivables/( gross sales/365) = $878,000/($7,035,600/365) = 45.55 days. Fixed assets turnover09 = Sales/Net fixed assets = $7,035,600/$817,040 = 8.61´. descend assets turnover09 = Sales/Total assets=$7,035,600/$3,497,152 = 2.01´. The firms inventory turnover and total assets turnover ratios have been steadily declining,...If you want to bewilder a full essay, order it on our website: OrderCustomPaper.com

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