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…
The Current Ratio(A4) for Ford Motor Company is 1.19 as opposed to the 2016 average of 1.20. This ratio shows the liquidity of the company. Whether or not it has the ability to pay long-term and short-term obligations made. The industry average was 1.3, which is higher than what was calculated. All this means that the industry has more current assets than Ford does. Quick ratio(A5) for the company is 0.71 in 2017 and 0.69 in 2016. The company does not have enough liquid current assets to pay its…
industrial goods and produces and sells farm and construction machinery. The three ratios that I believe are important in determining a company’s financial situation are the quick ratio, the inventory turnover ratio, and the net profit margin ratio. To find the quick ratio, we add cash, cash equivalents, short term investments and current receivables and divide them by the current liabilities. I found that the quick ratio is 1.86, we use this to find the companies liquidly position, which the…
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 current ratio, which…
and weaknesses of the company is ratio evaluation. Ratio analysis as a method of analysis and interpretation of financial statements. It is the technique of setting up and interpreting various ratios for assisting in making positive selections. “Financial ratio evaluation is the calculation and contrast of ratios which might be derived from the information in a organization 's financial statements. the extent and historical traits of these ratios may be used to make inferences…
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…
Profitability Ratios The productivity of an organisation and its ability to produce profits is measured using profitability ratios (Žager, Sačer & Dečman 2012). Two ratios which measure profitability are net profit margin and gross profit margin. Another two ratios which assess how sufficiently assets are being used are the return on total assets and asset turnover. JB Hi-Fi’s net profit margin remained stable over the 5 year period with its lowest recorded result in 2012 with 4.74%. In 2015,…
2. Value Creation – Ratio Analysis There are four key ratios that are detrimental in evaluating the market value of a company’s stock: Equity to Book Value Ratio, Price-Sales Ratio, Price-Earnings Ratio, and Earnings Per Share. The first ratio mentioned, Equity to Book Value Ratio, measures the market value of a company’s stock. It is determined through dividing the current price of the stock by the book value per share. Price-Sales Ratio compares the company’s stock to their total revenue or…
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…
Ratio Pos Malaysia Gdex Profitability Ratio Gross Profit Margin = Gross Profit RM 92,501,000 RM 24,179,086 Total sales RM 1,632,479,000 RM 19,368,505 = 0.06 = 1.25 Net Profit Margin = Net Profit RM 46,496,000 RM 22,829,045 Sales RM 1,632,479,000 RM 19,368,505 = 0.03 = 1.18 Return on Assets = Net Profit RM 46,496,000 RM 22,829,045 Average Total Assets RM 1,576,416,000 RM 215,967,671…