Report on the Financial Strengths and Weaknesses of Arapahoe
Report on the Financial Strengths and Weaknesses of Arapahoe-Goldstein Supermarkets, Inc.
Adaptation is essential to survival. Humans as a species share this primal knowledge of Social Darwinism and have applied it fittingly to our societal interactions and business endeavors. People, as well as companies are subject to its whims and as such must either adapt or fail. However, a company cannot know its standing or how to better its chances of survival in a cutthroat, profit-oriented business world without a thorough understanding of its own abilities and evolutionary advantages (or lack thereof). Therefore, it is necessary to periodically analyze the financial strengths and weaknesses of a company in order to ensure that it is doing everything within its power to ensure that it is operating at its peak in order to survive. After a thorough examination of certain measures of the profitability and liquidity of Arapahoe-Goldstein Supermarkets, Inc. we have come to the conclusion that the company, while on the right track to make a recovery, is currently in a dire situation financially. Indicators and financial analysis ratios within the company indicate an abysmally low profitability. Recommendations to alleviate this problem include slightly increased prices if possible, increased sales, reduced average total assets, and a slow in the speed of credit collection. Other indicators suggest a high short-term liquidity risk that can also be lessened by an increase in accounts receivable by way of longer collection periods resulting in more interest revenue. The last recommendation is to increase long-term debt in order to compliment one of strengths of the company over the last year, which has been its ratio of net income to interest expenses.
In analyzing the strengths and weaknesses of a company, the first thing that potential investors tend to look at is, quite simply, profitability. As well as being an important facet of company performance that is particularly
Adaptation is essential to survival. Humans as a species share this primal knowledge of Social Darwinism and have applied it fittingly to our societal interactions and business endeavors. People, as well as companies are subject to its whims and as such must either adapt or fail. However, a company cannot know its standing or how to better its chances of survival in a cutthroat, profit-oriented business world without a thorough understanding of its own abilities and evolutionary advantages (or lack thereof). Therefore, it is necessary to periodically analyze the financial strengths and weaknesses of a company in order to ensure that it is doing everything within its power to ensure that it is operating at its peak in order to survive. After a thorough examination of certain measures of the profitability and liquidity of Arapahoe-Goldstein Supermarkets, Inc. we have come to the conclusion that the company, while on the right track to make a recovery, is currently in a dire situation financially. Indicators and financial analysis ratios within the company indicate an abysmally low profitability. Recommendations to alleviate this problem include slightly increased prices if possible, increased sales, reduced average total assets, and a slow in the speed of credit collection. Other indicators suggest a high short-term liquidity risk that can also be lessened by an increase in accounts receivable by way of longer collection periods resulting in more interest revenue. The last recommendation is to increase long-term debt in order to compliment one of strengths of the company over the last year, which has been its ratio of net income to interest expenses.
In analyzing the strengths and weaknesses of a company, the first thing that potential investors tend to look at is, quite simply, profitability. As well as being an important facet of company performance that is particularly