FS ANALYSIS

Topics: Finance, Investment, Generally Accepted Accounting Principles Pages: 2 (516 words) Published: November 30, 2014
Castaneda Rosemarie E.
ACC 401/MANACCTG2

CURRENT RATIO
Based on my further analysis the current ratio is ranging to 1 is in the average level which suggest that the corporation would be able to pay off its short-term obligations if they came due at that point. They have enough current assets such as cash and cash equivalents, short-term investments, receivables, investments held for trading and sale that can be easily convertible into cash within a short period of time. So it means that the corporation is liquidity enough to settle current liabilities without having to sell off long-term, revenue generating assets. Considering the increasing value of their sales for about 15% a year which includes receivables and cash payments, and still they can maximize the cost of their sales and other expenses.

QUICK RATIO
Since SM Investment Corporation and Subsidiaries has an average quick ratio of 0.86-1 indicates that the business can meet its current financial obligations with the available quick funds on hand. Their cash flows are stable and predictable, as well as the corporation are more engaging in the expansion of their business through investments, shares of capital and other borrowings. In any case, the corporation is managing their assets with the right balance between liquidity risk arising from a low quick ratio and the risk of loss resulting from a high quick ratio they may encounter in the long run of business.

LIQUIDITY RATIO
The corporation has an increasing value of cash and cash equivalents and receivables of 5% every year; it means that they have sufficient cash to cover their current liabilities. The sales of the corporation also affects the amount of cash and receivables, since it shows a good performance through other sources such as their service fees, rent income, gain on sale of investments and other income, which contributes to their cash and receivables

EQUITY/DEBT RATIO
For the equity/debt ratio it increases to 1, so it...
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