The following financial ratios have been provided to you by your company: Your boss has asked you
Question:
Your boss has asked you to prepare a press release to highlight the company's financial results. Analysts have been predicting a strong year, and the CEO wants these highlights to reflect that.
Required
Prepare a brief press release describing the general performance of the company. Use the ratios as supporting evidence.
The term is enough to curl one's hair, conjuring up those complex problems we encountered in high school math that left many of us babbling and frustrated. But when it comes to investing, that need not be the case. In fact, there are ratios that,...
2012 47.0% 8.2% 13.1% 2.4 0.9 4.4 0.8 2011 26.0% 7.5% 12.3% 2010 15.0% 6.8% 11.1% Horizontal analysis of sales Profit margin Return on equity Current ratio Quick ratio Inventory turnover ratio Debt to assets ratio 2.1 1.8 1.1 1 4.6 4.7 0.7 0.6
Step by Step Answer:
Our sales increased by 47 from prior year and as you ...View the full answer
Related Video
Inventory turnover is a key metric that helps businesses evaluate the efficiency of their operations. A high turnover ratio is generally considered positive, indicating that the company is effectively selling its inventory and making efficient use of its resources. On the other hand, a low turnover ratio may indicate issues such as overstocking or slow sales and may require further examination to identify and address the underlying causes. Businesses use this ratio to make decisions about inventory levels, production schedules, and pricing strategies. It also helps businesses to identify areas where they may need to make improvements, such as reducing lead times for production or optimizing sales and marketing efforts. Additionally, inventory turnover is used by investors and analysts as a key performance indicator to evaluate the financial health and growth potential of a company.
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