Calculate the twelve financial ratios

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Reference no: EM132648705

Jim Connor is the owner of Wave Riders, a surf shop located in West Palm Beach, Florida.Jim has just received his end of the year financial statements from his accountant. When he sees his gross and net income he is dismayed. With almost $250,00 in gross profit he just does not understand why he is always short on cash to pay his employees and suppliers. One of his largest suppliers of surf boards notified him just last month that they would no longer extend him credit and he would have to pre-pay all of his orders. He puts a call into his accountant to set up a meeting with her to discuss the financial health of his business.

Problem 1: Using the financial statements provided, calculate the 12 financial ratios discussed in your text using the financial information that is provided below for Wave Riders

Problem 2: Looking at these ratios, are there any of them that look suspicious? If so, which ratios are they and what about them do you believe is cause for concern?

Reference no: EM132648705

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