Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Comparison with Sector Averages
Any conclusion relating to the signs of overtrading needs to be put in the context of the normal values of accounting ratios indicated by the sector averages. But it should be recognised that averages exist because no two companies are identical even when in the same business sector and the following discussion should be read with this in mind.
The escalating trend of receivables days away from the sector average of 100 days is clearly a cause for concern. If our stage of receivables was brought into line with the sector average our financing need would fall by $477000 ($2·75m × 21/121) which is equivalent to 17% of our forecast overdraft. The reduce in inventory days is encouraging although forecast inventory days remain 13% higher than the sector average indicating the possibility of further improvement.
There is obvious evidence of an increased reliance on short-term finance. The trend of payables days is escalating away from the sector average of 120 days and the forecast of 190 days is a very worrying 58% more than the average. This represents $940000 ($2·55m × 70/190) supplementary in trade finance that our company is carrying compared to a similar company in our business sector. On this evidence it is probable that our suppliers will begin to press for earlier settlement in the near future and this will add to the pressure already being exerted by our bank.
The quick ratio is expected to raise but will still be 15% below the sector average while the current ratio is expected to be 25% lower than the average. The low current as well as quick ratios reflect the increased reliance of our company in comparative terms on short-term sources of finance.
Complete the table and use the information to determine profit maximization or loss minimization. 1. Complete the table Normal 0 false false false EN-I
Time tickets for factory employees during the month of August are summarized as follows. Prepare a journal entry to record the total factory payroll, the indirect payroll and the d
GROUP STRUCTURES A group structure is the relationship between the holding company and its subsidiaries. There are normally four main types of group structures (apart from the
Blue sky Company's 12-31-13 balance sheet reports assets of $5,000,000 and liabilities of $2,000,000. All of the book value's are the same as the market values except for land, whi
Antitrust Laws - Assignment Help One of the foundations of business within the United States is the freedom to compete in the marketplace; however, certain laws have been creat
1. Jim buys only milk and biscuits. (a) In 2004, Jim earns $100, milk costs $2, biscuits cost $4 per dozen. Draw Jim's budget constraint (b) Now suppose that all prices i
Surviving Spouse - This is a person whose wife or husband died during tax year. A surviving spouse can file a JOINT RETURN for the year in which death occurred. Additionally a join
it is for what purpose?
D1=$0.65, D2=$0.74, D3=$0.79, D4=$0.84.Dividen grow continually at rate of 3% per year stating from year 5 onward.assuming the required rate of return to this stock is 12%.what wil
Thurston Howell IV is the sole heir to the Howell Enterprise fortune. He does not participate in the business, preferring to tend to his comic book collection. He does however own
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd