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 …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 …show more content…
For profit margin the industry has a decreasing trend, which in contrast to the positive trend, Ross has a much higher profit margin. The same thing is observed in the return on assets. Ross is performing really well at creating earnings with its assets and has a positive trend though the years. On the other hand, the industry average has a decreasing trend for ROE far from the good numbers that Ross is generating. For ROE, the industry has been very volatile, even reaching negative numbers a year ago. For the base year the industry has 1.31%, meaning that they are generating income from money invested through their shareholders. For this ratio Ross has been constant though the years, around 0.4%, only slightly under the industry average for the current
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 …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 …show more content…
For profit margin the industry has a decreasing trend, which in contrast to the positive trend, Ross has a much higher profit margin. The same thing is observed in the return on assets. Ross is performing really well at creating earnings with its assets and has a positive trend though the years. On the other hand, the industry average has a decreasing trend for ROE far from the good numbers that Ross is generating. For ROE, the industry has been very volatile, even reaching negative numbers a year ago. For the base year the industry has 1.31%, meaning that they are generating income from money invested through their shareholders. For this ratio Ross has been constant though the years, around 0.4%, only slightly under the industry average for the current