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Sony Ratios And Analysis Of Essay

This measure is -3.34% for FY 2009, compared to 10.66% in FY 2008 and 3.75% in FY 2007. 2.1.1.8 a quick ratio or liquid ratio measures the ability of a company to use its near cash or quick assets to immediately extinguish or retire its current liabilities. The higher the quick ratio, the better the position of the company. Sony's quick ratio has fallen to 0.14 in FY 2009 down from 0.24 in FY 2008 and 0.19 in FY 2007.

2.1.1.9 a high debt/equity ratio generally means that a company has been aggressive in financing its growth with debt. This is important to examine because it can result in volatile earnings as a result of the additional interest expense. Sony's debt/equity ratio has increased to 3.05 in FY 2009 versus 2.62 in FY 2008 and 2.47 in FY 2007.

2.1.1.10 Growth as measured by sales is horrible for Sony in FY 2009 when sales growth was -12.19% in comparison to positive increases of 26.86% in FY 2008 and 10.37% in FY 2007.

2.1.1.11 Earnings per share, total earnings divided by the number of shares outstanding, was -1.01 for FY 2009 following 3.51 in FY 2008 and 1.02 in FY 2007.

2.1.1.12 the inventory turnover ratio shows how many times a company's inventory is sold and replaced over a period of time. A low turnover implies poor sales and, therefore, excess inventory. With regard to this metric, Sony appears to be adjusting its inventory to the economic realities of lower sales. In FY 2009, the inventory turnover was 7.63 which is higher than 6.67 in 2008 and 6.83 in FY 2007.

2.1.1.13 Asset turnover measures a firm's efficiency at using its assets in generating sales or revenue. Sony's efficiency fell for FY 2009 with a value of 0.64 for this period, lower than the 0.70 value for both FY 2008 and FY 2007.

2.1.1.14 Accounts Receivables Turnover is a measure of the net sales for a fiscal reporting period and the average balance in accounts receivables....

This indicates the average time needed to convert receivables into cash. Sony's lower value for FY 2009 than FY 2008 will need to review its credit and collection methods.
Appendix B

FY 2009

FY 2008

FY 2007

Profitability

Gross Profit Margin

19.68%

23.12%

22.49%

Operating Margin

-2.13%

3.79%

0.94%

Profit Margin

-1.28%

4.16%

1.52%

EBTIDA Margin

6.43%

12.06%

10.20%

Management Effectiveness

Return on Assets

-0.82%

2.94%

1.06%

Return on Equity

-3.34%

10.66%

3.75%

Financial Health

Quick Ratio

0.14

0.24

0.19

Current Ratio

0.95

1.24

1.28

Debt/Equity

3.05

2.62

2.47

Debt/Assets

0.75

0.72

0.71

Growth

Sales

-12.19%

26.86%

10.37%

Earnings Per Share

-1.01

3.51

1.02

Dividends

71.03%

18.87%

0.95%

Operating Efficiency

Inventory Turnover Ratio

7.63

6.67

6.83

Asset Turnover Ratio

0.64

0.70

0.70

Receivables Turnover

-70.00

-95.01

-68.74

Bibliography

Beers, S. And Lund, M. Corporate finance: Using financial ratios. http://www.cooperativegrocer.coop/articles/index.php?id=223

Documents…

Sources used in this document:
Bibliography

Beers, S. And Lund, M. Corporate finance: Using financial ratios. http://www.cooperativegrocer.coop/articles/index.php?id=223

Documents submitted to the SEC (EDGAR) Form 20F and others. http://www.sony.net/SonyInfo/IR/library/sec.html
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