Base on the financial ratios of company A, what is your recommendations and conclusion for company A. COMPANY ARATIO20192018Liquidity1 Current Ratio0.671.072 Quick Ratio0.531.09Profitability3 ROE4 ROA6.74%8.65%3.43%5.08%5 GPM6 OPM7 NPMLeverage8 Debt Ratio9 Debt to Equity Ratio10 Time Interest Earned Ra17.25%18.78%3.62%5.74%3.77%4.99%0.720.671.421.153.984.94Efficiency11 A/R Turnover Ratio12 Average Collection Perid13 Inventory Turnover Ratid14 Average Age of Inventor15 Accounts Payable Ratio16 Average Age of Payable17 Operating Cycle18 Cash Conversion Cycle19 Total Asset Turnover Rat20 Fixed Asset Turnover Ra36.1140.3410916.0016.93222110.866.9133523230-1-221.061.346.066.78

Ratio analysis is the analysis in which ratios are compared for different periods and companies.

COMPANY A RATIO 2019 2018 Liquidity 1 Current Ratio 2 Quick Ratio Profitability 3 ROE 4 ROA 0.67 1.07 0.53 1.09 6.74% 8.65% 5.08% 18.78% 3.43% 5 GPM 17.25% 6 OPM 7 NPM 5.74% 4.99% 3.62% 3.77% Leverage 8 Debt Ratio 9 Debt to Equity Ratio 10 Time Interest Earned Ra Efficiency 11 A/R Turnover Ratio 12 Average Collection Perid 13 Inventory Turnover Ratid 14 Average Age of Inventor 15 Accounts Payable Ratio 16 Average Age of Payable 17 Operating Cycle 0.72 0.67 1.42 1.15 3.98 4.94 36.11 40.34 10 9 16.00 16.93 22 21 10.86 6.91 33 52 32 30 18 Cash Conversion Cycle -1 -22 19 Total Asset Turnover Ra 20 Fixed Asset Turnover Ra 1.06 1.34 6.06 6.78

COMPANY A RATIO 2019 2018 Liquidity 1 Current Ratio 2 Quick Ratio Profitability 3 ROE 4 ROA 0.67 1.07 0.53 1.09 6.74% 8.65% 5.08% 18.78% 3.43% 5 GPM 17.25% 6 OPM 7 NPM 5.74% 4.99% 3.62% 3.77% Leverage 8 Debt Ratio 9 Debt to Equity Ratio 10 Time Interest Earned Ra Efficiency 11 A/R Turnover Ratio 12 Average Collection Perid 13 Inventory Turnover Ratid 14 Average Age of Inventor 15 Accounts Payable Ratio 16 Average Age of Payable 17 Operating Cycle 0.72 0.67 1.42 1.15 3.98 4.94 36.11 40.34 10 9 16.00 16.93 22 21 10.86 6.91 33 52 32 30 18 Cash Conversion Cycle -1 -22 19 Total Asset Turnover Ra 20 Fixed Asset Turnover Ra 1.06 1.34 6.06 6.78

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Base on the financial ratios of company A, what is your recommendations and conclusion for company A.

COMPANY A
RATIO
2019
2018
Liquidity
1 Current Ratio
0.67
1.07
2 Quick Ratio
0.53
1.09
Profitability
3 ROE
4 ROA
6.74%
8.65%
3.43%
5.08%
5 GPM
6 OPM
7 NPM
Leverage
8 Debt Ratio
9 Debt to Equity Ratio
10 Time Interest Earned Ra
17.25%
18.78%
3.62%
5.74%
3.77%
4.99%
0.72
0.67
1.42
1.15
3.98
4.94
Efficiency
11 A/R Turnover Ratio
12 Average Collection Perid
13 Inventory Turnover Ratid
14 Average Age of Inventor
15 Accounts Payable Ratio
16 Average Age of Payable
17 Operating Cycle
18 Cash Conversion Cycle
19 Total Asset Turnover Rat
20 Fixed Asset Turnover Ra
36.11
40.34
10
9
16.00
16.93
22
21
10.86
6.91
33
52
32
30
-1
-22
1.06
1.34
6.06
6.78

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