Based on this analysis how would I assess the financial stability and operational efficiency of this company? Ratio and Ratio Formula (in thousands) 2015 2014 2013 Current Industry Average Liquidity Current Ratio =Current Asset / Current Liability 9,900/6,300 1.57 1.61 1.62 1.63 Acid Test Ratio or Quick Ratio = (Cash + Marketable securities + Accounts receivable)/Current liabilities (400+300+3,200)/6,300 0.62 0.64 0.63 0.68 Solvency Times Interest Earned =Earnings before interest & taxes/interest expense, gross (7,060+900)/900 8.84 8.55 8.5 8.45 Profitability Profit margin on sales = net income/sales 7,060/30,500 14% 13.20% 12.10% 13.00% Productivity Asset turnover = sales/avg total assets 30,500/6,000+5,400)/2) 1.85 1.84 1.83 1.84 Inventory turnover = COGS/avg inv 17,600/ (6,000+5,400)/2) 3.09 3.17 3.21 3.18
Based on this analysis how would I assess the financial stability and operational efficiency of this company?
|
Ratio and Ratio Formula |
(in thousands) |
2015 |
2014 |
2013 |
Current Industry Average |
|
|
Liquidity |
|
9,900/6,300 |
1.57 |
1.61 |
1.62 |
1.63 |
|
Acid Test Ratio or Quick Ratio = (Cash + Marketable securities + Accounts receivable)/Current liabilities |
(400+300+3,200)/6,300 |
0.62 |
0.64 |
0.63 |
0.68 |
|
|
Solvency |
Times Interest Earned =Earnings before interest & taxes/interest expense, gross |
(7,060+900)/900 |
8.84 |
8.55 |
8.5 |
8.45 |
|
Profitability |
Profit margin on sales = net income/sales |
7,060/30,500 |
14% |
13.20% |
12.10% |
13.00% |
|
Productivity |
Asset turnover = sales/avg total assets |
30,500/6,000+5,400)/2) |
1.85 |
1.84 |
1.83 |
1.84 |
|
Inventory turnover = COGS/avg inv |
17,600/ (6,000+5,400)/2) |
3.09 |
3.17 |
3.21 |
3.18 |
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