Financial Ratio Analysis: Ross Stores: Financial Ratio Analysis

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Ratio Analysis
Table 4. Industry Average Ratios Table 5. Ross Stores Ratios Tables 4 and 5 represent the industry average ratios for the past five years, and the Ross ratios for the same five years respectively.
Liquidity ratios are a measure used to find a company ability to pay its short-term debt obligations. If the ratio is high, the company is successfully paying its debt in a timely matter. The tables show a decreasing trend in the industry, current ratio, quick ratio, and cash ratio averages have been decreasing every year for the last five years. This means that the companies are not efficiently paying off their short-term debt. This trend is reflected in Ross’ performance in the past four years however, in the last year Ross has
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The industry average is decreasing until the last year, then increases again. For Ross, the total debt ratio keeps decreasing until the base year where it increases a little bit again. Compared to the industry, Ross is performing slightly better with 0.51 compared to the 0.52 reflected in the industry. For the debt equity ratio the industry was doing really well for the past couple of years, but in the base year it had a massive increase from -0.14 to 6.30. Ross experienced a similar situation, but only increased to 0.17, which is much better than the industry average. The industry is using more debt than Ross is to pay it assets like it is shown in the equity multiplier. Ross only has 2.06 ratio value and the industry has more than …show more content…
They measure the ability for a company to create sales with it assets. For the industry average, most of the ratios are reflecting a small positive trend though the years, only the receivable turnover has a negative trend meaning that it takes more time for the companies in the industry to collect the account receivables. Ross is also having a small variance in its trend, but it is positive just like the industry average. Following the industry average, Ross also has a negative trend for the receivables turnover. Ross has higher number than the industry average in receivables turnover ratio, this signifies that it is doing a better job collecting the account receivables; in the other ratios Ross is performing just like the industry average or a slightly

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