Ratio Comparisons: Albertson’s Versus Kroger Company

Albertson’s 2-Year Comparison
Ratios are important tools to be used when analyzing a company’s financial health. There are four categories of ratios that are broken down into thirteen ratios. Eight ratios will be used to analyze the financial statements of Albertson’s for the years 2003 and 2004. The first category of ratio analysis is the liquidity ratio. In this category, we have calculated the current ratio. The current ratio for Albertson’s for 2003 is 1.2 and for 2004 is 1.05. Companies that have a ratio at or below 1.0 should be concerned, unless they have inventory that can be quickly converted to cash. www.beginnersinvest.about.com . In the case of Albertson’s, this would be expected. This is also proven with the quick or acid-test ratio. For 2003, the ratio is .36 and or 2004 is .28. The Quick Test ratio does not apply to the handful of companies where inventory is almost immediately convertible into cash (such as McDonalds, Wal-Mart, etc.). www.beginnersinvest.about.com. The second category of ratios is the asset utilization ratios. In this category, we have calculated the total asset turnover. For the year 2003, the ratio is 1.93 and for 2004 the ratio is 2.18. The higher the ratio, the better assets are being utilized. For every dollar in assets Albertson’s owns, the company sold $2.18 in goods. On the other hand, the higher the turnover rate, the lower the profit margin. www.beginnersinvest.about.com. In an industry such as Albertson’s, the next ratio, the average collection period is expected to be low. Most of its business is in cash, so it is no surprise that for 2003 the average days for collections was seven and for 2004, it decreased to six days. One would think that the majority of this would be in the form of returned checks. This ratio should make management pleased with the result. Another asset utilization ratio calculated is inventory turnover. For 2003,...

...The companies’ financial ratios can be compared with the ratios of other equivalent companies between business sectors at one point of time. These comparisons provide explanations on the relative financial status and performance of the company compared to the relative performance of its competitors. Comparisons are usually made with other companies in the same business sector and the benchmark is assumed to be the suitable value for a company. The assumption here is for the companies in the same business sector to have the almost identical financial ratios. If the ratio of a company shows a significant difference with the standard ratio, then further investigation must be done to find the cause of that difference. For evaluation, a company’s financial ratio is compared to the competitors one by one, and then classified as satisfactory or unsatisfactory, depending upon the direction and how far it has diverted from standard. The table below summarizes the comparison and evaluation of ratio analysis for the companies between business sectors:
RATIO | COMPARISON / EVALUATION |
| |
lllllllllllllll
a. Liquidity
The company’s achievement in current ratio and quick...

...(Major in Banking and Finance) – Year III
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Ratio Analysis Report
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Student: Kevin Galea 205891 (M)
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Lecturer: Dr. Emanuel Camilleri
Introduction
The purpose of the following report is to aid Build-It Ltd in planning the direction that the company may want to go over the next few years. The report entails a financial analysis which will give the directors an understanding of how well the company is performing.
Figures were obtained from comparative balance sheets and profit and loss statements from the last two years. This information enabled the development of percentage and ratio analysis (see appendices), which was then used to create the report.
Profitability Ratios Analysis
Profitability refers to the ability to make profit from the company’s business activities. It shows how efficiently the management can make profit by using all the resources available.
A very important ratio is the Return on Capital Employed (ROCE). This shows the profit made in relation to the resources employed. Build-It Ltd’s ROCE ratios for 2011 and 2012 were calculated as 22.12% and 25.64% respectively. This increase in the ROCE represents that Build-It Ltd has strengthened marginally its profitability position of the firm.
Although...

...Zhiwei Wu
Ratio Analysis of Google CompanyRatio analysis is an important way to investigate a corporation’s financial statement. It provides the detailed data that indicate a company’s financial activity, performance and how well the managers operate their company. It is very useful for the investors, shareholders and even the company’s managers when they want to understand the financial situation of the company and helps them to make the right investment decisions. Now I am trying to use the ratio analysis to analyze the Google Corporation here.
There have five different types of ratio analysis: liquidity ratios, activity ratios, leverage ratios, profitability ratios and marker ratios. All of them have different kinds of specific ratios which indicate different information about the company. But at here, I pick Current Ratio, Average Collection Period and Return on Equity (ROE) to do this analysis.
1. Current Ratio.
Current Ratio = Current AssetsCurrent Liabilities
Current Ratio indicates a company’s ability to meet its short-term obligations. The Current Ratios of Google Corporation in 2008, 2009, and 2010 were 8.76, 10.62 and 4.16. As we know that high Current Ratio indicates more...

...Ratio Analysis
Ratio analysis is basically used to understanding the financial health of a business entity. With the help of ratios we can easily calculate from current year performance of the companies and are then compared to previous years. Ratio analysis conducts a quantitative analysis of information in a company’s financial statements. These Ratios are most commonly used in banking sector can be divided into five main categories
Liquidity Ratios
Leverage Ratios
Profitability Ratios
Activity Ratios
Market Ratios
A) Liquidity Ratios
Liquidity Ratios are used to determine a company's ability to meet its short terms obligations.
These include;
1) Current Ratio
2) Acid Test Ratio
3) Working capital
Current Ratio
What Does Current Ratio Mean?
A liquidity ratio that measures a company's ability to pay short-term obligations. Also known as "liquidity ratio", "cash asset ratio" and "cash ratio".
OR
It is a measure of general liquidity and is most widely used to make the analysis for short term financial position or liquidity of a firm. It is calculated by dividing the total of the current assets by total of the current liabilities.
Formula = Current Assets /...

...|Accounting I (ACC 101) | |
| |2012 |
|Kroger Co (KR:New York) |Project |
Yakub Hashim Noor
9403
American Collage Dubai
Answers of the question asked :- (Task A )
1) The company I am working on is Kroger
2) http://www.kroger.com/Pages/default.aspx
3) Industry: Food and Drug Stores
4) Kroger's headquarters are in downtown Cincinnati
5) Financial statement and balance sheet :
http://investing.businessweek.com/research/stocks/financials/financials.asp?ticker=KR&dataset=incomeStatement&period=A¤cy=native
http://investing.businessweek.com/research/stocks/financials/financials.asp?ticker=KR&dataset=balanceSheet&period=A¤cy=native
6) Amount reported in financial statement & balance sheet in million
a) Sales revenue/Revenues (Net) - 90,374.0
b) Net income/loss 602.0
c) Other revenues (if any) Nil
d) Total Current assets 7,325.0
e) Amount of Cash balance 188.0
f) Any one current liability(PAYABLE) 4,329.0
Snapshots year ends...

...Liquidity Ratios: Current Ratio = Current Assets/Current Liabilities
Efficiency Ratios Asset Turnover Ratio = Sales Revenue/ (Fixed Assets + Current Assets)
Profitability Ratios Net Profit Margin = (Net Profit x 100) /Sales Revenue
Return on Capital Employed = Net Profit (Operating Profit) x 100
(ROCE) Capital Employed
Solvency Ratios Gearing Ratio = Total Liabilities/Shareholders Equity
Investment Ratios Earnings per Share (EPS) = Net Income – Dividends on preferred stock
Average Outstanding Shares
Price/Earnings Ratio (P/E) = Market Price of Share/EPS
Aviation Industry Specific Ratios…
Available Seat Miles = Total No. of Seats Available for Transporting Passengers
(ASM) x No. of Miles Flown during Period
Revenue Passenger Mile = No. of Revenue Paying Passengers x
(RPM) No. of Miles Flown During Period
Load Factor
Quick/Acid Test Ratio = Current Assets less Stock/Current Liabilities
Dividend Yield = Annual Dividends per Share
Price per Share
Liquidity Ratios
Current Ratio = Current Assets/...

...Financial Ratio Analysis of Morrison in Comparison with Tesco
Introduction
The purpose of this report is to critically analyse the financial ratio results of Morrison 2008 and 2009 as an equity analyst and compare it with like for like by using Tesco supermarket.
To achieve this report will be looked at in four main areas. Firstly, we will use financial ratios obtained from annual reports of 2008 and 2009 to analysis and appraise Morrison’s financial performance. This would be followed by a comparative analysis with Tesco, for the same period. In addition, a trend analysis will be done to show the pattern of Morrison’s financial performance over the years 2006 to 2009. Furthermore, a comparison will be made with industry average figures where available to show its development in the industry.
Finally, a conclusion would be argued to reveal how well the managers and the company have performed and how well they handled the demands of the economic downturn to reduce the shock on their financial performance.
The ratios would be looked at in five broad areas: Profitability, Liquidity, Gearing, Working Capital management and Investors.
PROFITABILITY
“…Profitability relates profits to the investment made to achieve them.” R.H Parker (2007) it also provides an insight to the degree of success in achieving the purpose of the business.
Morrison Tesco...

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