Analyze the firm’s current financial position from both a cross-sectional and a time-series viewpoint. Break your analysis into evaluations of the firm’s liquidity, activity, debt, profitability, and market. 

Summarize the firm’s overall financial position on the basis of your findings in part b.

 

Transcribed Image Text:

Historical and Industry Average Ratios Summary of Company Ratios (2004-2005, Including 2006 Industry Averages)< Overall Liquidity Current ratio + Quick (acid-test) ration Activity Inventory turnover Average collection periode Average payment periode Total asset turnover Debt Debt ratio Times interest earned ratio Fixed-payment coverage ratio Gross profit margine Operating profit margin Net profit margine Earnings per share (EPS) Return on total assets (ROA) Return on common equity (ROE)<¹ Market Price/earnings (P/E) ratio Market/book (M/B) ratio 2004+ 2.044 1.32+ 5.74 43.8DAYS 75.8 days 0.94 36.80% 5.6 2.4+ 13.70% 2005 2.08 1.46 10.5+ 1.25 5.74 51.2DAYS 81.2 days 0.79 44.30% 31.40%+ 33.30%+ 14.60%+ 11.80% 8.20% 5.40% $3.26 $1.81 7.80%+ 4.20%+ 8.50% 3.34 1.4 10 0.85 2006+ + + + INDUSTRY P AVERAGE RATIO 2.054 1.434 6.6 44.3 days 66.5 days 0.75 40.00% 4.34 1.54 30.00% 11.00% 6.20% $2.26 4.60% 8.50%++ 12.54 1.34 Historical and Industry Average Ratios Summary of Company Ratios (2004-2005, Including 2006 Industry Averages)< Overall Liquidity Current ratio + Quick (acid-test) ration Activity Inventory turnover Average collection periode Average payment periode Total asset turnover Debt Debt ratio Times interest earned ratio Fixed-payment coverage ratio Gross profit margine Operating profit margin Net profit margine Earnings per share (EPS) Return on total assets (ROA) Return on common equity (ROE)<¹ Market Price/earnings (P/E) ratio Market/book (M/B) ratio 2004+ 2.044 1.32+ 5.74 43.8DAYS 75.8 days 0.94 36.80% 5.6 2.4+ 13.70% 2005 2.08 1.46 10.5+ 1.25 5.74 51.2DAYS 81.2 days 0.79 44.30% 31.40%+ 33.30%+ 14.60%+ 11.80% 8.20% 5.40% $3.26 $1.81 7.80%+ 4.20%+ 8.50% 3.34 1.4 10 0.85 2006+ + + + INDUSTRY P AVERAGE RATIO 2.054 1.434 6.6 44.3 days 66.5 days 0.75 40.00% 4.34 1.54 30.00% 11.00% 6.20% $2.26 4.60% 8.50%++ 12.54 1.34

Answer rating: 100% (QA)

To analyze the firms current financial position lets break it down into different categories from both a crosssectional and timeseries viewpoint 1 Liq... View the full answer