July 9, 2012
Date: July 9, 2012
RE: Kudler Fine Foods ratio analysis
One of the things that we will be going over is some of the ratios for Kudler Fine Foods through Liquidity, Profitability, and solvency ratios. We will look into some of the finding that were found through these ratios and discuss them. One of the things that we found was where Kudler Fine Foods’ position is with these ratios. The first area that we look at is profitability. Profitability Ratios:
When looking through the profits of the company through the balance sheets we will look at a couple of areas. The first area that we will look into is the asset turnover of the company. The beginning assets started in at $1,971,000. When you take that by the total assets of $2,675,250 you get the turnover margin which is 4.04. Net Sales___ = Asset Turnover $10,796,200 = 4.04 Total Assets $2,675,250
Next area we see is the profit margin. You see through the balance sheet that Kudler Fine foods over the board did pretty good when you look at it from a profit stand point. The way we calculated the profit margin was Net Income over sales and this was the information that we got:
Net Income = Profit Margin$668,950__ = .06
Net Sales $10,796,200
Looking into the return on assets it was interesting to see some of the findings when we calculated.
Net Income____________ = Return on Assets $668,950 = .28 (Beginning + Ending total assets)/2 ($1,971,000 +$2,675,250)/2
Return on Common stockholders’ equity:
Net Income = Return on Common stockholders’ equity. $668,950 =.90 Shareholders’ equity $746,290
Solvency ratios measure the company’s ability to meet long-term obligations. This is a ratio that measures the company’s size after tax income. One of the things that you look at with solvency ratios is...