Q 3. You have been hired as a financial analyst of a firm and your team is working on an independent assessment of XYZ Inc. Your assistant has provided you with the following data for XYZ Inc. and their industry. 2020- Industry Average 53.25 R Ratio 2020 2019 2018 Inveĥtory Turnover Recaivables in days Debt to Equity Quick Ratio Curnent Ratio 62.65 42.42 32.25 94 63 50 115 0.75 0.85 0.90 0.88 1.028 1.03 1.029 1.031 1.33 1.21 1.15 1.25 Required: a) In annual report of firm CEO wrote, 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? b) What can you say about the firm's collection period and inventory turnover? c) You are asked to provide the shareholders with an assessment of the firm's leverage. What would you say?
Q 3. You have been hired as a financial analyst of a firm and your team is working on an independent assessment of XYZ Inc. Your assistant has provided you with the following data for XYZ Inc. and their industry. 2020- Industry Average 53.25 R Ratio 2020 2019 2018 Inveĥtory Turnover Recaivables in days Debt to Equity Quick Ratio Curnent Ratio 62.65 42.42 32.25 94 63 50 115 0.75 0.85 0.90 0.88 1.028 1.03 1.029 1.031 1.33 1.21 1.15 1.25 Required: a) In annual report of firm CEO wrote, 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? b) What can you say about the firm's collection period and inventory turnover? c) You are asked to provide the shareholders with an assessment of the firm's leverage. What would you say?
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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Transcribed Image Text:Q 3. You have been hired as a financial analyst of a firm and your team is working on an
independent assessment of XYZ Inc. Your assistant has provided you with the following
data for XYZ Inc. and their industry.
2020-
Industry
Average
53.25
R
Ratio
2020
2019
2018
Inventory Turnover
Recaivables in days
Debt to Equity
Quick Ratio
Current Ratio
62.65
42.42
32.25
94
63
50
115
0.75
0.85
0.90
0.88
1.028
1.03
1.029
1.031
1.33
1.21
1.15
1.25
Required:
a) In annual report of firm CEO wrote, 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?
b) What can you say about the firm's collection period and inventory turnover?
c) You are asked to provide the shareholders with an assessment of the firm's
leverage. What would you say?
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