PLEASE EXPLAIN WHAT EACH RATIO IS, AND HOW THIS IS BUSINESS ISDOING BY THE INFORMATION GIVEN FOR EACH RATIO. EVERY RATIO NEEDS ANEXPLANATION, THEN EXPLAIN IF THE BUSINESS IS A GROWNING CONCERN
Ratio Analysis
Profitability Ratios:
Profit Margin- The profit margin is 6.19% and5.66% for the company respectively, with and industry average of5.92%.
Return on Assets (Investment)-
Net income/total assets is 7.15% and 6.07% for 2014 and 2015respectively, with and industry average of 6.61%.
Net income/sales X Sales/Total Assets is 8.25% and 7.66% for2014 and 2015 respectively, with and industry average of 7.96%.
Return on Equity-
Net income/stockholders equity is 10.38% and 9.15% for 2014 and2015 respectively with an industry average of 9.77%
Return on assets(Investments)/1-Debt/assets is 8.28% and 7.64%for 2014 and 2015 resepectively with an industry average of7.96%
Asset Utilization Ratios:
Receivable Turnover- The receivable turnover is5.8 and 5.9 for 2014 and 2015 respectively, with an industryaverage of 5.9.
Average Collection Period- The averagecollection period is 61.91 and 60.68 for 2014 and 2015respectively, with an industry average of 61.3.
Inventory Turnover- Inventory turnover is 4.64and 3.3 for 2014 and 2015 respectively, with and industry averageof 3.97.
Fixed Asset Turnover- It is 9.5 and 10.1 for2014 and 2015 respectively, with and industry average of 9.8
Total Asset Turnover- It is 1.2 and 1.1 for2014 and 2015 respectively, with and industry average of 1.1
Liquidity Ratios:
Current Ratio- It is 3.97 and 2.93 for 2014 and2015 respectively, with an industry average of 3.5
Quick Ratio- It is 2.15 and 1.35 for 2014 and2015 respectively, with an industry average of 1.8
Debt Utilization Ratio:
Debt to Total Assets- It is 28.65 and 31.53%for 2014 and 2015 respectively, with an industry average of30.09%
Times Interest Earned- It is 17 and 19 for 2014and 2015 respectively with an industry average of 18
Fixed Charge Coverage- It is 2.8 and 2.7 for2014 and 2015 respectively with an industry average of 2.7