1a. (You) calculate the 12 ratios for James Confectioners for this year. Ratio Liquidity Ratios Current...

Transcribed Image Text:

1a. (You) calculate the 12 ratios for James Confectioners for this year. Ratio Liquidity Ratios Current ratio Quick ratio Leverage Ratios Debt ratio Debt-to-Net-Worth ratio Times-Interest-Earned ratio Operating Ratios Average Inventory Turnover Ratio Average Collection Period Ratio Average Payable Period Ratio Net-Sales-to-Total-Assets Ratio Profitability Ratios Net-Profit-on-Sales Ratio Net-Profit -to-Assets Ratio Net-Profit-to-Equity Ratio (You) Current Year 2.01 1.00 0.62 1.59 2.07 4.62 2.49 33.63 1.93 4.4% 8.2% 21.3% (Ivey) Last Year 1.86 1.07 0.64 1.71 2.49 4.75 34.60 31.10 2.17 7.40% 9.20% 29.21 2a. Enter the "Current Year" ratios (You) calculated in question 1. Confectionary Industry Average 1.70 0.80 0.70 1.00 2.30 4.90 23.0 days 33.5 days 2.10 7.10% 5.60% 16.50% 1b. Use the two ratios that have the MOST variance and explain the issues these ratios reveal. Then calculate the percent variation between (Your) current year ratios and (Ivey's) last year ratios. Ratio Liquidity Ratios Current ratio Quick ratio Leverage Ratios Debt ratio Debt-to-Net-Worth ratio Times-Interest-Earned ratio Operating Ratios Average Inventory Turnover Ratio Average Collection Period Ratio Average Payable Period Ratio Net-Sales-to-Total-Assets Ratio Profitability Ratios Net-Profit-on-Sales Ratio Net-Profit -to-Assets Ratio Net-Profit-to-Equity Ratio (You) Current Year 2.01 1.00 0.62 1.59 2.07 4.62 2.49 33.63 1.93 4.4% 8.2% 21.3% (Ivey) Last Year 1.86 1.07 0.64 1.71 2.49 4.75 34.60 31.10 2.17 7.40% 9.20% 29.21 Percent Variation 8.1% -6.5% -3.1 -7.0% -16.8% -2.7% -92.8% 8.1% 11.0% -40.5% -10.8% -27.0% 2b. Determine how the ratios you developed for this year relate to those that were calculated for the firm last year. Give at least (3) details from your reading and analysis that are most likely to explain the percent variances between this year and last year. 3. Use the (3) three factors from question 2 (two), explain specific areas that may cause the firm financial difficulties in subsequent years. 4. Suggest changes to increasing the financial success of the firm using the evaluation you completed in questions 1 thru 3. These recommendations must be specific and detailed. 5. What pricing advice and justifications can you make to the firm? Make sure you focus on pricing. 1a. (You) calculate the 12 ratios for James Confectioners for this year. Ratio Liquidity Ratios Current ratio Quick ratio Leverage Ratios Debt ratio Debt-to-Net-Worth ratio Times-Interest-Earned ratio Operating Ratios Average Inventory Turnover Ratio Average Collection Period Ratio Average Payable Period Ratio Net-Sales-to-Total-Assets Ratio Profitability Ratios Net-Profit-on-Sales Ratio Net-Profit -to-Assets Ratio Net-Profit-to-Equity Ratio (You) Current Year 2.01 1.00 0.62 1.59 2.07 4.62 2.49 33.63 1.93 4.4% 8.2% 21.3% (Ivey) Last Year 1.86 1.07 0.64 1.71 2.49 4.75 34.60 31.10 2.17 7.40% 9.20% 29.21 2a. Enter the "Current Year" ratios (You) calculated in question 1. Confectionary Industry Average 1.70 0.80 0.70 1.00 2.30 4.90 23.0 days 33.5 days 2.10 7.10% 5.60% 16.50% 1b. Use the two ratios that have the MOST variance and explain the issues these ratios reveal. Then calculate the percent variation between (Your) current year ratios and (Ivey's) last year ratios. Ratio Liquidity Ratios Current ratio Quick ratio Leverage Ratios Debt ratio Debt-to-Net-Worth ratio Times-Interest-Earned ratio Operating Ratios Average Inventory Turnover Ratio Average Collection Period Ratio Average Payable Period Ratio Net-Sales-to-Total-Assets Ratio Profitability Ratios Net-Profit-on-Sales Ratio Net-Profit -to-Assets Ratio Net-Profit-to-Equity Ratio (You) Current Year 2.01 1.00 0.62 1.59 2.07 4.62 2.49 33.63 1.93 4.4% 8.2% 21.3% (Ivey) Last Year 1.86 1.07 0.64 1.71 2.49 4.75 34.60 31.10 2.17 7.40% 9.20% 29.21 Percent Variation 8.1% -6.5% -3.1 -7.0% -16.8% -2.7% -92.8% 8.1% 11.0% -40.5% -10.8% -27.0% 2b. Determine how the ratios you developed for this year relate to those that were calculated for the firm last year. Give at least (3) details from your reading and analysis that are most likely to explain the percent variances between this year and last year. 3. Use the (3) three factors from question 2 (two), explain specific areas that may cause the firm financial difficulties in subsequent years. 4. Suggest changes to increasing the financial success of the firm using the evaluation you completed in questions 1 thru 3. These recommendations must be specific and detailed. 5. What pricing advice and justifications can you make to the firm? Make sure you focus on pricing.

Answer rating: 100% (QA)

Answer 2 RATIO James Confectioners Current Last Percent Year Year Variation Liquidity Ratios Current Ratio 201 186 81 Quick Ratio 116 107 84 Leverage ... View the full answer