Pinnacle Manufacturing Company

above the 75th quartile for the industry. I believe this result to be a strength, however, I do

Return on Total Assets was 4.43% which is below five percent. That indicates that the company is not accurately converting its assets into profit. The total for Return on Stockholders’ Equity was 8.89%, however financial analysts prefer ROE to range between 15-20 %. The company’s low ROE indicates that the company is not generating profit with new investments. Lastly, Debt-to-Equity ratio for the company was 1.01 which indicates that investors and creditors are equally sharing assets. In the view of creditors, they see a high ratio as a risk factor because it can indicate that investors are not investing due to the company’s overall performance. The totals of these three ratios demonstrate that the company’s financial state is not as healthy as it should be.

To make further comment we need to investigate further by looking at industry, competitors and economy. There may be other factors causing this ratio to decrease such as a general decline gross margin profit in retail sector affecting all companies, high inflation causing less demand, increasing competition etc. We should do further investigation to make further comment.

The company is cutting back on profits earned but not losing value for its investors with price to earnings being favorable at 19.18 (www.hoovers.com).

Profitability ratios decreasing from 2005 to 2006 although the sales has increased substantially and the net income as well but not in the same percentage of increase due to the high reliance on debt as the interest expense increased as mentioned before.

This is said because the return on assets ratio is low. When it is low the company uses less money on more investment. The profit margin is low as well calculated at only .6% showing that Kudler Foods had a low profit at that reporting time.  The debt to total assets ratio was .28%, which showed the company is healthy. The times interest earned ratio was 9.8%, which backs up claims of financial health. The solvency ratio shows Kudler Foods can pay back long-term obligations. Each ratio has different users interest in mind. Return on common stockholder’s equity is defined as Net Income / Total Capital, and Return on Common Stockholders’ Equity: 676,795 / 1,928,960 = 35.09% Return. Here is a comparison of this (2003) information to the same information from last years’ (2002) records to begin to determine a trend.

The return on equity ratio for the company is -66.01%, K12’s is 3.7%, and the industry is 21.35%, This is another indication that the company is not operating well and that the shareholders are currently not earning from their investments in the company. On the other hand, the competitor -K12- is also operating poorly with comparison to the industry’s average percentage, but it is performing better than Learning Tree International, Inc. Also, using another profitability ratio, which is return on assets. The company’s ratio is -13.3, K12’s ratio is 2.74, and the industry’s ratio is 11.85; consequently, the company has a negative percentage while the percentages for the industry and K12 are positive. So the company is not employing its total asset to generate profit as the same as K12. In short, when comparing the profitability ratios of the company with industry and K12, it shows that the company is in unstable condition with its investors.

is nearly half of that of industry average in the table 5, which suggests that it is worse at using its assets to earn profits than the average of industry. Besides, it is a little above that of Tencent, which implies that it is also worse than its major rival. Therefore, the poor assets use efficiency is one of the reasons of its low

Q1. Based on the 2004 statement of profit and loss data, do you agree with Water’s decision to keep product 103?

If this ratio is high means company owns too many debts which may decrease their

Apple, Inc. currently has a Price-to-Earnings ratio of 43.70, compared to the industry standard of 36.50, and the S&P 500 average of 20.73. This indicates that Apple has a lower amount of risk than other firms in the computer manufacturing industry and other firms in

The long-term liquidity risk ratio such as LT debt/Equity, D/E, and Total Liabilities to Total Assets all show a decline from year 2005 due to the repayment of debts. The interest coverage ratio also shows a healthy number of 29.45 in comparison to the industrial average of 15.04 indicating a high ability to pay out its interest expense. Such a low relative risk is not surprising due to the nature of its business depending heavily in R&D development and large intangible assets.

The financial data of company does not tell us the entire position of an organisation and its performance over the year or certain period of time for comparative purposes. Therefore, the use of ratios

The financial performance of the company over the years six t thirteen is shown in table no 7. The data includes Revenue generated over the years, Earning per share, Return on Investment and Stock Prices. Chart 5 shows that there has been a decline in the revenues generated. Charts 6 to 8 all show a decline in Earnings per Share, Return on Equity and Stock Prices suggesting a poor financial performance by the company.

While the business may appear to be growing, because of other companies being purchased, overall performance of the company may be falling, but it may not be evident from the financial statements.