Write a response to a company given below discussing its profitability, debt-paying ability, and liquidity. Also, what
Fantastic news! We've Found the answer you've been seeking!
Question:
Write a response to a company given below discussing its profitability, debt-paying ability, and liquidity. Also, what strategic decisions should be made by the firm to support the improvement?
AutoZone Company’s Scenario:
AutoZone’s financial statements indicate the following:
- There is a net profit margin of 14.5%.
- The firm’s long-term debt has increased significantly over the past year and could impact its future debt-paying ability if it continues to increase.
- Additionally, AutoZone’s liquidity ratio of 0.79 is alarming because a ratio below 1 suggests that the company is having difficulty meeting its short-term financial obligations.
Related Book For
Fundamentals of Cost Accounting
ISBN: 978-1259565403
5th edition
Authors: William Lanen, Shannon Anderson, Michael Maher
Posted Date: