Describe the financial and operations conditions. Choose 5 ratios and comment on
ID: 2488497 • Letter: D
Question
Describe the financial and operations conditions. Choose 5 ratios and comment on the outcome.
§NET REVENUES: 37,016.97
§COST OF SALES = $18,304.81
§GROSS PROFIT = 18,712.16
§OPERATING EXPENSES = 33,132.45
§NET LOSS: -14,736.92
§CURRENT ASSETS = 9640.29
§PROPERTY, PLANT, & EQUIPMENT = 40,088.50
§OTHER ASSETS = $1,000
§CURRENT LIABILITIES = $7,504.13
§LONG TERM LIABILITIES = $15,375.10
§CAPITAL = $27,849.56
§NET CASH PROVIDED BY OPERATING ACTIVITIES = 12,408.04
§NET CASH USED IN INVESTING ACTIVITIES = -6,637.50
§NET CASH PROVIDED BY FINANCING ACTIVITIES = 23,811.81
§NET INCREASE IN CASH: 4,766.27
Explanation / Answer
current assets current liabilities current ratio 9640.29 7504.13 1.284665 company current ratio is 1.28 which is less than ideal ratio of 2 so liquidity position of the company is ok still current assets are more than current liabilities net income total assets return on assets -14736.92 50728.79 -0.2905 return on assets are negative which is -.29 which is a serious concern for the company company's assets are not generating enough returns net income capital employed return on capital employed -14736.92 27,849.56 -0.52916 rate of return on capital employed is negative and is -.529 which show the operating deficiency of the company. gross profit ratio gross profit sales 18,712.16 37,016.97 0.505502 gross profit ratio is 50% which is ok for the firm company is earning 50% profit over cogs net profit sales net profit ratio -14,736.92 37,016.97 -0.39811 net profit ratio is negative as company is running into losses and its ratio is -39% which is a serious concern that company is having 50% gross profit and net profiit is -39 % which means operating expenses are very much which is a serious concern over all financial position of the company is very poor and expenses are not properly managed
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