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 riding habit of ratios are important to let a social club build out were its stand financially against former(a) competitors. Also, ratios can be utilize to let investors know were a company stands financially, and pay back organisational improvements with their finances. There are five major ratios Liquidy ratios, Asset focalise ratios, Debt management ratios, Profitability ratios, and Market value ratios. B. judge DLeons 2009 gunpoint and restless ratios based on projected balance immutable 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 universe useful (1) managers to help return the business, (2) bankers for credit analysis, and (3) to stockholders for stock valuation. Would theses unal ike types of analyst have an passable interest in company liquidy ratios. The stream ratio 2,680,112 true liabilites1,144, 800=2.34 and the officious 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 hygienic below the industry averages. C. Calculate the 2009 inventory derangement, days sales (DSO), fixed assets turnover, and congeries assets turnover. How does DLeon enjoyment o f assets stack up against other firms in the! industry The catalogue turnover09= gross revenue/Inventory= $7,035,600/$1,716,480 = 4.10´. DSO09= Receivables/(gross revenue/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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