Submitted by: Submitted by djbushway
Views: 345
Words: 278
Pages: 2
Category: Other Topics
Date Submitted: 10/05/2010 01:12 PM
1. Calculate a few ratios and compare Reed’s results with industry averages.(Some industry averages are shown in Exhibit 16.4.) What do these ratios indicate?
Liquidity Ratios Reed’s Industry
Current ratio 2.0 2.7
Quick Ratio .94 1.6
Receivables turnover 4.93 7.7
Average collection period 74.08 47.4
Efficiency Ratios
Total Asset turnover 1.3 1.9
Inventory turnover 2.9 7.0
Payable turnover 7.0 15.1
Profitability Ratios
Gross profit margin 29.8 33.0
Net profit margin 4.2 7.8
Return on common equity 16.0 25.9
Examination of the ratios indicates that Reed’s is in poor condition in all areas compared to the rest of the industry.
Bbbbb bbbbbbbbbbbbbb b b b b b b b b b bb b b b b bbbbb bbbbbb bb iiiiii iiiii ii ii I I i
Fff fff fff fff fff ff fff ff ff ff fff ff fffkkk kk kk kkkkkk kk k k k k k k k k k k k k k k k k k k k k k k k k k k k k k k k k k k k k k k k k k k k k k k k k k k k k k k k k k k k k k k k k k k kk k k k k k k k k k k k k k
Test Test Test Test Test Test Test Test Te Test Test Test
Test Test Test Test
Test Test Test Test Test
Test Test Test Test Test
Test
Test
Test
Test
st
Test