Company G Case Analysis

1280 Words 6 Pages
Register to read the introduction… The ratio is found by adding, cash, short term investments, and account receivables net and divide that by the current liabilities. Year 11 showed .64 and year 12 shows .43 which is a significant decline. In year 11 the company was near the lower quartile of .6 and this time it has gone even lower showing a greater weakness of the company. This is a showing a decline trend.
Inventory Turnover: The inventory turnover ratio determines how quickly the company is turning over its inventory. The higher the number the faster the company is moving the product. This ratio is determined by taking the cost of goods sold and dividing it by the average inventory. Year 12 shows an Inventory turnover of 5.23 which is down from Year 11 of 6.1. The lower industry quartile is 8.3 which means that year 11 and 12 have been significantly lower. Company G is showing a significant downward trend in inventory turnover. This is showing a definite weakness for the
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This can show how effective the company is in utilizing its assets prior to paying taxes. To determine this ratio take the net income and add the interest expense and divide those by the average total assets. In year 11 that rate was 12.30% and year 12 only showed a 2.48% increase to 14.78%. This rate has stayed consistent between the last 2 years and is trending in the right direction even if it is slow. I would consider this strength at this time because it is below the upper quartile of 17.2 but above the median quartile and lower quartiles of 12.3 and …show more content…
To determine this take the net income and subtract the preferred dividends and the divide by the number of shares of common stock outstanding. In year 12 the stock is up to $1.117 from the previous year of $.672, this rate is high for the industry data quartiles. Due to the significant increase from the previous year I show this as strength for Company G. One reason for the increase was the company bought back two million shares reducing the common stock outstanding. I show this as trending in the right

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