I need you to evaluate the performance of the firm with these numbers u got for
ID: 2821416 • Letter: I
Question
I need you to evaluate the performance of the firm with these numbers u got for the answers
Answer 1 of 1 Done 53407/ 365/ 12.66 3 Days Working Capital Ratio a Cureent Ratie Cuwrrent Liabilties 5033 Assets Turnover Ratios Sales/Total Assets $3407/5704 Inventory Turnover Cost of goods sold /Inventory 25036 Days Sales îïweetery·ses/1nventory Turnover 3657570 64.04 Day cLeverage Ratios Debt Ratio Total Liabilities/Total Asset (22147+39770)/57048 Debt Equity Ratio Total Liabilities/Total Stockholders equity 61937/17278 Equlty Ration Total Equity, Total Assets 17278 0.30 Long Term debt to Equity satio Long Tem delt/Total Equity 770 / 17278 d. Coverage ratios Times interest Earned EBIT/nberest Expense 9827/ 47 20.60 Curent Ratie Current Assets /Current Liabilities 37115/22147 Quick Ratie Quick Assets/Current Liabilties (5489 423+4062)22147 Gross Margin Ratie Gross Profit/Sales 26331/51407 51.22% Net Profit Margin Net Income /sales Return on Asets Net Income/Total Assets Return onIquity Net income /Total EquityExplanation / Answer
Answer:
Nederland Company Products Company need 28.83 days to convert their receivable to cash whereas Days in sales inventory is 64 days which means they are collecting receivables faster than paying their creditors.
Asset Turniver ratio is less than 1 which means company is generating $0.9 sales for every $1 invested which means its isn't using its asset efficiently.
Debt Ratio and long term debt is very high as compared to industry which shows Company's liabilities are more than its assets .The assets are insufficient to pay off the liabilities
Companies with a higher debt to equity ratio are considered more risky to creditors and investors than companies with a lower ratio.
higher equity ratios are typically favorable for companies. This is usually the case for several reasons. Higher investment levels by shareholders shows potential shareholders that the company is worth investing in since so many investors are willing to finance the company. A higher ratio also shows potential creditors that the company is more sustainable and less risky to lend future loans.
Interest coverage ratio at 20 times is excellent
Current ratio below 1 is not favourable when industry average is more than 2
Quick ratio too is very low
Gross margin and net profit margin show excellent figures which means expenses are handled efficiently
ROE and ROA too are very good compared to industry average