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What does it mean if a company ratio's are below or above industry average?   Please see attached scans depicting company data and industry averages

What does it mean if a company ratio's are below or above industry average?   Please see attached scans depicting company data and industry averages

Essentials Of Investments
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
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What does it mean if a company ratio's are below or above industry average?

 

Please see attached scans depicting company data and industry averages.

Year 2017 2018 2019 Overdraft ($'000) 50 567 1,167 Trade creditors ($'000) 400 733 1,133 Interest ? ? The industry averages for firms similar to ARG Inc. are Net Profit 9% Creditor days 70 days Margin Interest cover 15 times Current ratio 2.1 times Stock days 85 days 75 days Quick ratio 0.8 times Debtor days DEBT/Equity ratio 40% (using Book value)
Transcribed Image Text:Year 2017 2018 2019 Overdraft ($'000) 50 567 1,167 Trade creditors ($'000) 400 733 1,133 Interest ? ? The industry averages for firms similar to ARG Inc. are Net Profit 9% Creditor days 70 days Margin Interest cover 15 times Current ratio 2.1 times Stock days 85 days 75 days Quick ratio 0.8 times Debtor days DEBT/Equity ratio 40% (using Book value)
ARG INC Income Statement for the years ending December 31 2019 2018 2017 (S'000) (S'000) (S'000) Revenue 5,200 3400 2600 Cost of Goods sold 4570 2806 2104 Profit before interest & tax 630 594 496 Interest 70 34 3 Earnings before tax Tax 560 140 560 493 140 123 Net Income 420 420 370 Dividends 20 20 20 Retained profit 400 400 350 ARG Inc Balance Sheet as at December 31 2019 2018 2017 (S'000) (S'000) (S'000) Fixed Assets 1.600 1,200 800 Current Assets Inventory Accounts Receivable 1,450 1,000 600 1.400 850 400 2,850 1,850 1,000 Total Assets 4,450 3,050 1,800 Current Liabilities 2.300 1,300 450 Ordinary shares 1,000 1,000 1,000 Reserves 1,150 750 350 Total Liabilities & Owners Equity 4,450 3,050 1,800
Transcribed Image Text:ARG INC Income Statement for the years ending December 31 2019 2018 2017 (S'000) (S'000) (S'000) Revenue 5,200 3400 2600 Cost of Goods sold 4570 2806 2104 Profit before interest & tax 630 594 496 Interest 70 34 3 Earnings before tax Tax 560 140 560 493 140 123 Net Income 420 420 370 Dividends 20 20 20 Retained profit 400 400 350 ARG Inc Balance Sheet as at December 31 2019 2018 2017 (S'000) (S'000) (S'000) Fixed Assets 1.600 1,200 800 Current Assets Inventory Accounts Receivable 1,450 1,000 600 1.400 850 400 2,850 1,850 1,000 Total Assets 4,450 3,050 1,800 Current Liabilities 2.300 1,300 450 Ordinary shares 1,000 1,000 1,000 Reserves 1,150 750 350 Total Liabilities & Owners Equity 4,450 3,050 1,800
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