You will need the Ratio Summary and the Comparative Analysis documents related to Dry Supply, Inc.,...

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You will need the Ratio Summary and the Comparative Analysis documents related to Dry Supply, Inc., in order to apply what you have learned so far to perform a comparative ratio analysis. To access the documents click PRINT in the upper right of this page, then choose the desired PDF document. Dry Supply Company - Mini-Case Study [continued] Anne Schippel, business banker, is analyzing Dry Supply's financial statements for 20x1 to 20x3. She has prepared a Ratio Summary report for each of those years showing 5 categories of financial ratios. In addition, she prepared a Comparative Analysis for 20x3 showing select industry ratios from each of the same 5 categories with values in the low, median, and high range for each. Part I: Comparison of Dry Supply's annual financial ratios For each of the 5 categories of ratios [liquidity; efficiency; profitability; leverage; coverage] perform your own financial ratio analysis. You will need to first state our conclusion regarding each category of ratios, then support your conclusion. Further, you will provide at least 2 additional questions that would improve on your analysis of that category of ratios. A suggested format is as follows: Provide a summary statement regarding that category of financial ratios [e.g.: The liquidity of Dry Supply has deteriorated over the last three years]. Then support your conclusion [e.g.: The current ratio, which measures the firm's ability to pay its current liabilities, went from 2.5x in 20x1 to 1.5x in 20x3. A similar negative trend occurred for the quick ratio, and the net working capital]. You would then suggest at least 2 probing questions [e.g.: Did the firm increase its reliance on trade credit? Is the firm collecting receivables faster than it is paying its suppliers?] PART II: Comparison of Dry Supply to the Industry: Compare the selected ratios of Dry Supply for 20x3 with the ones for the industry in the Comparative Analysis document. Are there any areas in which Dry Supply is doing better than, same as, or worse than the industry? What concerns would you have, if any, for each of those areas? Comparative Analysis: Dry Supply Wholesale Dry Cleaning Equipment Industry Quartiles 20x3 Ratio Higher Current Quick Tangible leverage Pretax profit margin Return on assets Interest coverage 2.4x 1.2x 0.9x n/a 10.7x 5.5x 1.5x 0.8x 2.5x 2.1x 3.2x 2.1x Median 1.2x 0.5x 5.1x n/a (0.3x) 1.0x Lower Ratio Summary: Dry Supply Liquidity Current Ratio Quick Ratio Net Working Capital Leverage Debt to Net Worth Tangible Leverage Tangible Effective Leverage Profitability Gross Profit Margin Operating Profit Margin Pretax Profit Margin Net Profit Margin Return on Assets Return on Equity Efficiency Accounts Receivable Turnover Inventory Turnover Accounts Payable Turnover Sales to Total Assets Coverage Traditional Cash Flow Coverage Interest Coverage Fixed Charge Coverage Dividend Payout Ratio 12/31/20x1 12/31/20x2 12/31/20x3 1.3x 0.8x $47,000 3.3x 3.3x 1.3x 27.9% 2.3% 2.2% 1.0% 8.2% 35.1% 44.5d 41.3d 17.9d 3.4x n/a 4.3x 4.5x 0.0% 1.5x 1.0x $66,000 2.7x 2.7x 1.0x 28.8% 3.0% 2.8% 1.5% 10.0% 36.6% 44.0d 39.4d 17.9d 3.4x n/a 4.7x 4.7x 0.0% 1.8x 1.2x $92,000 1.9x 1.9x 0.7x 31.3% 5.0% 4.4% 2.5% 14.8% 42.6% 44.5d 38.8d 17.9d 3.4x n/a 4.6x 4.3x 0.0% You will need the Ratio Summary and the Comparative Analysis documents related to Dry Supply, Inc., in order to apply what you have learned so far to perform a comparative ratio analysis. To access the documents click PRINT in the upper right of this page, then choose the desired PDF document. Dry Supply Company - Mini-Case Study [continued] Anne Schippel, business banker, is analyzing Dry Supply's financial statements for 20x1 to 20x3. She has prepared a Ratio Summary report for each of those years showing 5 categories of financial ratios. In addition, she prepared a Comparative Analysis for 20x3 showing select industry ratios from each of the same 5 categories with values in the low, median, and high range for each. Part I: Comparison of Dry Supply's annual financial ratios For each of the 5 categories of ratios [liquidity; efficiency; profitability; leverage; coverage] perform your own financial ratio analysis. You will need to first state our conclusion regarding each category of ratios, then support your conclusion. Further, you will provide at least 2 additional questions that would improve on your analysis of that category of ratios. A suggested format is as follows: Provide a summary statement regarding that category of financial ratios [e.g.: The liquidity of Dry Supply has deteriorated over the last three years]. Then support your conclusion [e.g.: The current ratio, which measures the firm's ability to pay its current liabilities, went from 2.5x in 20x1 to 1.5x in 20x3. A similar negative trend occurred for the quick ratio, and the net working capital]. You would then suggest at least 2 probing questions [e.g.: Did the firm increase its reliance on trade credit? Is the firm collecting receivables faster than it is paying its suppliers?] PART II: Comparison of Dry Supply to the Industry: Compare the selected ratios of Dry Supply for 20x3 with the ones for the industry in the Comparative Analysis document. Are there any areas in which Dry Supply is doing better than, same as, or worse than the industry? What concerns would you have, if any, for each of those areas? Comparative Analysis: Dry Supply Wholesale Dry Cleaning Equipment Industry Quartiles 20x3 Ratio Higher Current Quick Tangible leverage Pretax profit margin Return on assets Interest coverage 2.4x 1.2x 0.9x n/a 10.7x 5.5x 1.5x 0.8x 2.5x 2.1x 3.2x 2.1x Median 1.2x 0.5x 5.1x n/a (0.3x) 1.0x Lower Ratio Summary: Dry Supply Liquidity Current Ratio Quick Ratio Net Working Capital Leverage Debt to Net Worth Tangible Leverage Tangible Effective Leverage Profitability Gross Profit Margin Operating Profit Margin Pretax Profit Margin Net Profit Margin Return on Assets Return on Equity Efficiency Accounts Receivable Turnover Inventory Turnover Accounts Payable Turnover Sales to Total Assets Coverage Traditional Cash Flow Coverage Interest Coverage Fixed Charge Coverage Dividend Payout Ratio 12/31/20x1 12/31/20x2 12/31/20x3 1.3x 0.8x $47,000 3.3x 3.3x 1.3x 27.9% 2.3% 2.2% 1.0% 8.2% 35.1% 44.5d 41.3d 17.9d 3.4x n/a 4.3x 4.5x 0.0% 1.5x 1.0x $66,000 2.7x 2.7x 1.0x 28.8% 3.0% 2.8% 1.5% 10.0% 36.6% 44.0d 39.4d 17.9d 3.4x n/a 4.7x 4.7x 0.0% 1.8x 1.2x $92,000 1.9x 1.9x 0.7x 31.3% 5.0% 4.4% 2.5% 14.8% 42.6% 44.5d 38.8d 17.9d 3.4x n/a 4.6x 4.3x 0.0%

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Based on the provided Ratio Summary and Comparative Analysis documents lets perform a comparative ratio analysis for Dry Supply Inc I will analyze each category of ratios and provide a conclusion supp... View the full answer