One has been hired as an analyst for BNZ Bank and your team is working on an independent assessment of Blaster PLC. Blaster PLC is a firm that specializes in the production of freshly imported farm products from China. their assistant has provided him with the following data for Blaster PLC and their industry. Ratio 2020 2019 2018 2020- Industry Average Long-term debt 0.45 0.40 0.35 0.35 Inventory Turnover 62.65 42.42 32.25 53.25 Depreciation/Total Assets 0.25 0.014 0.018 0.015 Days’ sales in receivables 113 98 94 130.25 Debt to Equity 0.75 0.85 0.90 0.88 Profit Margin 0.082 0.07 0.06 0.075 Total Asset Turnover 0.54 0.65 0.70 0.40 Quick Ratio 1.028 1.03 1.029 1.031 Current Ratio 1.33 1.21 1.15 1.25 Times Interest Earned 0.9 4.375 4.45 4.65 Equity Multiplier 1.75 1.85 1.90 1.88 In the annual report to the shareholders, the CEO of Blaster PLC wrote, “2020 was a good year for the firm with respect to our ability to meet our short-term obligations. We had higher liquidity largely due to an increase in highly liquid current assets (cash, account receivables and short-term marketable securities).” Is the CEO correct? Explain and use only relevant information in the analysis. What can be said about the firm's asset management? Be as complete as possible given the above information provide the shareholders with an assessment of the firm's solvency and leverage. Be as complete as possible given the above information
One has been hired as an analyst for BNZ Bank and your team is working on an independent assessment of Blaster PLC. Blaster PLC is a firm that specializes in the production of freshly imported farm products from China. their assistant has provided him with the following data for Blaster PLC and their industry. Ratio 2020 2019 2018 2020- Industry Average Long-term debt 0.45 0.40 0.35 0.35 Inventory Turnover 62.65 42.42 32.25 53.25 Depreciation/Total Assets 0.25 0.014 0.018 0.015 Days’ sales in receivables 113 98 94 130.25 Debt to Equity 0.75 0.85 0.90 0.88 Profit Margin 0.082 0.07 0.06 0.075 Total Asset Turnover 0.54 0.65 0.70 0.40 Quick Ratio 1.028 1.03 1.029 1.031 Current Ratio 1.33 1.21 1.15 1.25 Times Interest Earned 0.9 4.375 4.45 4.65 Equity Multiplier 1.75 1.85 1.90 1.88 In the annual report to the shareholders, the CEO of Blaster PLC wrote, “2020 was a good year for the firm with respect to our ability to meet our short-term obligations. We had higher liquidity largely due to an increase in highly liquid current assets (cash, account receivables and short-term marketable securities).” Is the CEO correct? Explain and use only relevant information in the analysis. What can be said about the firm's asset management? Be as complete as possible given the above information provide the shareholders with an assessment of the firm's solvency and leverage. Be as complete as possible given the above information
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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One has been hired as an analyst for BNZ Bank and your team is working on an independent assessment of Blaster PLC. Blaster PLC is a firm that specializes in the production of freshly imported farm products from China. their assistant has provided him with the following data for Blaster PLC and their industry.
|
Ratio |
2020 |
2019 |
2018 |
2020- Industry Average |
|
Long-term debt |
0.45 |
0.40 |
0.35 |
0.35 |
|
Inventory Turnover |
62.65 |
42.42 |
32.25 |
53.25 |
|
|
0.25 |
0.014 |
0.018 |
0.015 |
|
Days’ sales in receivables |
113 |
98 |
94 |
130.25 |
|
Debt to Equity |
0.75 |
0.85 |
0.90 |
0.88 |
|
Profit Margin |
0.082 |
0.07 |
0.06 |
0.075 |
|
Total Asset Turnover |
0.54 |
0.65 |
0.70 |
0.40 |
|
Quick Ratio |
1.028 |
1.03 |
1.029 |
1.031 |
|
Current Ratio |
1.33 |
1.21 |
1.15 |
1.25 |
|
Times Interest Earned |
0.9 |
4.375 |
4.45 |
4.65 |
|
Equity Multiplier |
1.75 |
1.85 |
1.90 |
1.88 |
- In the annual report to the shareholders, the CEO of Blaster PLC wrote, “2020 was a good year for the firm with respect to our ability to meet our short-term obligations. We had higher liquidity largely due to an increase in highly liquid current assets (cash, account receivables and short-term marketable securities).” Is the CEO correct? Explain and use only relevant information in the analysis.
- What can be said about the firm's asset management? Be as complete as possible given the above information
- provide the shareholders with an assessment of the firm's solvency and leverage. Be as complete as possible given the above information
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