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A Company Ratio Analysis Essay

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The objective of this study is to carry out the ratio analysis of the company between 2009 and 2011. Current Ratio
The current ratio assesses a company ability settle its short-term obligations. A current ratio below 1 reveals that the company is not in good financial health. Overview of the current ratio of the company reveals that it is in good financial health and will be able to settle its short-term obligation because its current ratio between 2007 and 2011 is more than 2 despite that the company current ratio was decreasing between 2007 and 2011.
Quick Ratio

The quick ratio is the ability of a company to meet its short-term obligation. However, quick ratio excludes the inventories. Analysis of the company quick ratio reveals that the company's quick ratio is decreasing between 2007 and 2011 from 1.64 to 0.97.

Times Interest Earned

This is a tool to measure a company ability to meet its debt obligation. However, the company Times Interest Earned is decreasing from 5.60 in 2007 to 3.50 in 2011 revealing that the company is a good position to settle its debt.

Account Receivable Turnover

Accounts receivable turnover measures the number of times a company collects its accounts receivable in a given year. The company Account Receivable Turnover declines from 5.60 in 2007 to 4.20 in 2011.

Days to Collect Receivables

Days to Collect Receivables is the number of days a company receives payments owed them.The company number days to collect account in a year increased...

The company inventory turnover declines between 2007 to 2011.
Days to Sell Inventory

This analysis shows the number of days to sell the inventory. The lower the number of days, the better for the company. The analysis of the company days to sell inventory reveals that the number of days increased from 108.63 days in a year in 2007 to 179.80 days in 2011.

Net Sales Divided by Tangible Assets

The analysis measures the rate a company is able to generate sales from its tangible assets. Analysis of the company shows that the company fixed asset turnover is stable between 2007 and 2011.

Profit Margin

The profit margin calculates the amount earned from every dollar. In 2007, the company earned 0.14 cents from every dollar earned from selling its products, however decreased to 0.13 cents in 2011.

Return on Asset

The return on asset reveals that the efficient way a company is using the asset to generate earnings. The company return on asset is good between 2007 and 2011.

Return on Equity

The return on equity reveals that the efficient way a company is using the equity to generate earning. The company return on equity was decreasing from .11 in 2007 to .5 in 2011.

Earning Per Share

The Earning Per Share is an indicator of the company level of profitability showing the portion of the…

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