Financial ratio

The debt to equity ratio measures a company’s financial leverage by dividing its liabilities by its equity. A high ratio indicates a company is using too much financing to grow. Although financing is a great tool for increasing production and capital, it is significant that CanGo shows financial growth so that higher earnings can be distributed to shareholders rather than cash flow going to repaying debts. Barnes & Noble’s most recent debt to equity ratio is 0.33 (Businessweek.com, 2014),…

quick ratios, with a current ratio of 5.39 and a quick ratio of 4.53 it is pretty clear that CanGo could easily pay of their debt if need be and still be able to keep running. CanGo has a working capital of 164,820,000 on again this shows that CanGo is more than capable of paying off its debts. When looking at CanGo’s level of solvency they seem to be doing very well in this area as well with a current debt ratio is40.23%. According to the Risk Management Association the average debt ratio for…

Liquidity Ratio The current ratio is a liquidity ratio, which analyzes WestJet 's working capital, and measures their capability to settle its short- term obligations. This ratio also assists investors and creditors in understanding the liquidity of the airline and how easily they can pay off its current liabilities. According to WestJet 's annual reports ,"We maintain a strong liquidity position and sufficient financial resources to meet our obligations as they fall due."(WestJet, 2015). With…

Financial Condition Liquidity Ratio: In figure 1, the current ratio illustrates Imperial Brands ability to pay their current liabilities. Imperial Brands were not likely to pay their current liabilities in 2012 and 2013, since a current ratio that is below 1 is not a good sign. However, their current ratio increased significantly in 2014 and 2015, since their current liabilities reduced and their current assets increased. Moreover, Imperial Brands’ current ratio is lower than the industry…

Financial ratios are numerical relationships between financial figures found on the income statement and the balance sheet of a business. When multiple figures are compared, the relationships between those figures help reveal important operational information that, when adjusted, could improve their financial situation (Kim & Avoun, 2005). Unfortunately, few organizations within the hospitality industry commonly use financial ratios to determine the health of their business (Kim & Avoun, 2005)…

Introduction Financial ratio analysis is a useful comparison tool and it was developed to perform quantitative analysis on number found on financial statements. This comparison shows the trend or movement. However, JB plc can use the common insurance ratios to establish which brokers it should be conducting business with. From this financial statement, BU plc looks to be in good shape. By using the ratios, we can determine whether it fits within certain industry norms. The following is an…

Benefits and Limitations of Ratio Analysis In order to make economic decisions, business owners and investors need to gather information, summarize the details, and interpret the results of the data. It is the basic flow of the accounting cycle wherein the products are the financial statements, which the management prepares and issue for the use of the public. Furthermore, performance of other financial analysis techniques could help users of the financial report evaluate the overall…

significance of ratio analysis:- The ratio analysis is one of the most powerful tools of the financial analysis. this is used to a device to analyze and interpret the financial health of enterprise. Ratio analysis is stands for the process of determining and presenting the relationship of items and groups of items in the financial statements. It is an important tool of the financial analysis. The main following are the points of importance of ratio analysis: a) Managerial uses of ratio…

 3.3 Short- term Solvency: The Short term solvency ratio computes whether the income of an organization is adequate to deal with the fleeting commitments (Droms & Wright 2015). It incorporates current ratio, Acid Test ratio and Cash Flow from Operations to Liabilities. I have computed all the three proportions for the organization. Firstly, Current Assets measure the liquidity which is truly imperative to manage liabilities inside a year (Droms & Wright 2015). The standard is 2:1; lower than…

1. Introduction 1.1 Background on Financial Ratio Analysis Lenders and investors alike often use financial ratio analysis when determining the performance, solvency, and general business practice of a firm. Ratio analysis can serve as a tool to understand the relationship between quantities, and can be a useful benchmark in the comparison of two or more organizations within a common industry (Faello, 2015). The use of these ratios can determine factors such as asset and debt management, as well…