Analysis: 2:1 is the benchmark of current ratio. Here in 2007 current asset is 0.53 against 1 current liability. In every year the company is unable to increase their current ration. Because the current ratio in 2010 decreases to 0.51. The company has a small amount of current asset for each amount of current liability in every year and its improvement was not that much remarkable. Though the company never crossed the benchmark, we can say that it has to try more to get close to the benchmark.

2009| 2010|
0.28| 0.24|
Acid Test Ratio:

Analysis: The benchmark of acid test ratio is 1:1. The closer, the better. From the table we can see that in 2009 the company had 0.28 asset against 1 current liability without short-term inventories. In 2010 the ratio decreased by 0.04. From this ratio the company is disabling to utilize their assets at an optimum level. The company failed to improve their liquidity. The company was far away from the benchmark. It is presenting not a good acid test ration. Receivable Turnover:

2009| 2010|
59.3| 69.1|

Analysis: In receivable turnover, higher turnover is better for a company. The above table shows how many times each company was able to collect its debit. Here we can see that in 2009 the company was not less turnover comparing to 2010. The increasing receivable turnover ratio of this company indicates that the collection of account receivable of this company is efficient.

Inventory Turnover:
2009| 2010|
27.6| 26.8|

Analysis: In such a ration, the higher the turnover the better it is for the company. We can see that in 2009 the company’s inventory is sold and replaced 25.4 which is increased in 2010 and reach 26.8 times. The inventory of this company is less than the cost of goods sold. So the company is efficiently managing and selling its inventory. Profit Margin:

...
RatioAnalysis University of Phoenix
HCS/571 Finance Resource Management Sept 24, 2013Rosetta Stringfellow, MBA, BSRatio AnalysisRatioanalysis is a widely used managerial tool that compares one number with another to gain insights that would not arise from looking at either of the numbers separately. Ratioanalysis is used to examine and interpret the relationship between two numbers on a financial statement. This is done so that the managers of a facility can determine whether or not the organization needs to change any of their financial variables in order to remain competitive in their market. The ratioanalysis converts numbers into meaningful comparisons which managers can use to compare their facilities with others within the same market. The management team can also use the ratioanalysis to see how the facility is performing from year to year. In sum, ratioanalysis shows the strengths and weaknesses of a health care facility (Finkler, Kovner, & Jones, 2007).
The financial data for this paper are from the financial statements of Norwalk Hospital located in Fairfield County, Connecticut. Common size ratios allow comparisons between comparable health care organizations. It is important to see how the...

...RatioAnalysisRatioanalysis is used to evaluate relationships among financial statement items. The ratios are used to identify trends over time for one company or to compare two or more companies at one point in time. Financial statement ratioanalysis focuses on three key aspects of a business: liquidity, profitability, and solvency.
Liquidity ratios
Liquidityratios measure the ability of a company to repay its short‐term debts and meet unexpected cash needs.
Current ratio. The current ratio is also called the working capital ratio, as working capital is the difference between current assets and current liabilities. This ratio measures the ability of a company to pay its current obligations using current assets. The current ratio is calculated by dividing current assets by current liabilities.
This ratio indicates the company has more current assets than current liabilities. Different industries have different levels of expected liquidity. Whether the ratio is considered adequate coverage depends on the type of business, the components of its current assets, and the ability of the company to generate cash from its receivables and by selling inventory.
Acid‐test ratio. The acid‐test ratio is also called the quick...

...Lowe’s RatioAnalysis
In the period from 1997-2001 Lowe’s showed a steady increase in working capital. It went from being $2110 million in 1997 to $4920 million in 2001. This shows the company had good amount of liquid assets to conduct and build its business. Lowe’s fixed assets went from $3005 million in 1997 to $8653 million in 2001. Total capital is found by taking working capital and adding it to fixed assets. Lowe’s total capital increased from $5219 million in 1997 to $13736 million in 2001. The company’s tax rate remained at 37.5% from 1997 to 2001. NOPAT means net operating profit after taxes. It is a measure of operating efficiency. Lowe’s NOPAT increased from $390 million in 1997 to $1123.75 million in 2001. This shows that they were operating more efficiently in each year.
There are two profitability ratios that are important, they are return on capital and return on equity. Return on capital measures the return that an investment generates for stock and bondholders. It indicates how good a company is at turning capital into profits. Lowe’s return on capital increased from 7.47% in 1997 to 8.18% in 2001. The second profitability measure is return on equity. It measures how profitable a company is by comparing net income to average shareholders’ equity. It also shows how efficient or inefficient a company is at utilizing its equity. It increased from 13.73% in 1997 to 15.34% in 2001. So Lowe’s was making a profit....

...Team A RatioAnalysis Memo Liquidity Ratios section
Current Ratio
A company must consider current ratios when determining the Liquidity ratios; this is because a current ratio is used to determine what the company liquidity and their ability to pay the companies short term debts back. The current ratios are figured out by talking the company’s current assists and dividing them by their current liabilities. In order to become a ratio it must be taken by x: 1, x is the current assets for every dollar of the company’s liabilities.
Example A:
Current Ratio= Wal-Mart’s Current Ratio= = 1.60:1
Wal-Mart’s Current Ratio is in the billions of dollars range of course, but what this tells us is that Wal-Mart gains $1.60 of current assets for every $1.00 of current liabilities. Showing that Wal-Mart has the assets to cover the cost of their current liabilities, which is good for companies as large as Wal-Mart.
Quick Ratio
The quick ratio also known as the Acid Ratio is calculated by taking the company’s current assets minus the company’s inventories divided by current liabilities. Showing how the company can pay back its short term obligations that need to paid off quickly, giving the company a better rounded number by excluding the company’s inventory for its current...

...Running Head: RATIOANALYSIS
Starbucks Corporation & McDonalds Corporation
McDonald’s Corporation
McDonald’s Corporation operates in the food service industry. The company has its restaurants in more than 100 countries of the world. McDonald’s, the world’s largest food chain is headquartered in U.S. having an employee population of 390000 (About McDonald's..., 2008).
Starbucks Corporation
Seattle based, Starbucks Corporation is the leading coffeehouse chain in the world. The company has its operations in more than 44 countries. The main products offered by Starbucks various kinds of drinks, snacks, coffee beans. The company also operates in the field of marketing of music, books (The Company, 2008).
RatioAnalysisRatioAnalysis (2007)
Ratios Starbucks McDonalds
Current Ratio 0.79 0.80
Quick Ratio 0.30 0.67
Debt Equity Ratio 1.34 0.92
Proprietary Ratio 0.43 0.52
Solvency Ratio 0.57 0.48
Inventory Turnover Ratio 12.13 118.77
Gross Profit Ratio (%) 23.34 34.69
Net Profit Ratio (%) 7.15 15.67
Return on Proprietors' Funds (%) 29.45 15.67
Earning Per Share 0.91 2.06
Current Ratio
Current Ratio may be defined as the relationship between current assets and current liabilities. It is also known as working capital...

...Date:
Re: RatioAnalysis
Listed below you will find the findings from the current and quick ratios calculations. Huffman trucking’s current ratio within the liquidity ratio during 2 years indicates an increase. The Quick ratio within the liquidity ratio also indicates an increase. Since prospective lenders want to see a positive current ratio, they would be a type of user that would be interested in this type of ratio. Since the quick ratio evaluates Huffman Trucking’s creditworthiness, investors would be the type of user interested in this type of ratio.
The receivables turnover also is a part of measuring liquidity. It measures how quickly Huffman
Trucking can convert certain of their assets to quick cash. It also tells how many times on
average Huffman Trucking collects its receivables during a given period. This indicates
Huffman Trucking’s debt collection ability. The receivables turnover ratio gives an indication if
Huffman Trucking is having difficulty collecting from their credit made sales. The formula for
Huffman Trucking to use to find this ratio is the net receivable sales ÷ average accounts
receivables. The inventory turnover measures the number of times on average that Huffman Trucking sells inventory during a given period. Inventory turnover tells how often...

...MODERN CEMENT
RatioAnalysis
Activity Analysis
|ST Activity Ratios |2002 |2003 |2004 |2005 |2006 |
|Inventory Turnover Ratio |0 |1.11 |0.097 |0.085 |0.696 |
|Average No. Days Inventory In Stock |0 |328.9 |3742.72 |4301.69 |524.56 |
Interpretations:
Short Term Activity ratios calculate the operational efficiency regarding the utilization of short term assets
Inventory Turnover Ratio: The ratio tells about how many times Inventory turnover is made or complete in a given year. Higher the ratio is better that mean the inventory is turnover very quickly. Inventory Turnover Ratio 1.11 in 2003 indicates that company can sell total finished goods (inventory) 1.11 times every year. Increase in this ratio indicates the efficiency in managing inventory, which is not present in this company as we can the declining rate over the past years. This also indicates that the reserve of inventory and inventory holding cost is high for this company.
Inventor Turnover Period: The ratio tells about number of days inventory remains in the stock and lower the ratio and better it is. From the table we can see that the ratios are too high...

...
RATIOANALYSIS
Financial ratios are useful indicators of a firm's performance and financial situation. Most ratios can be calculated from information provided by the financial statements. Financial ratios can be used to analyze trends and to compare the firm's financials to those of other firms. In some cases, ratioanalysis can predict future bankruptcy.
Financial ratios can be classified according to the information they provide. The following types of ratios frequently are used:
1. Liquidity ratios
2. Capital Structure and Solvency
3. Return On Investment
4. Operating Performance
5. Asset Utilization
6. Market Measures
The ratios measure the short term ability of the company to pay its current short-term liabilities.
1. Liquidity Ratio
Liquidity ratios provide information about a firm's ability to meet its short-term financial obligations. They are of particular interest to those extending short-term credit to the firm. Two frequently-used liquidity ratios are the current ratio (or working capital ratio) and the quick ratio.
i. Current ratio:
The current ratio is the ratio of current assets to current liabilities
The company have decreasing trend in current ratio...