What are the top 7 ratio used in ratio analysis (list in orderfrom most important), define them and their formula and Also, list5 industry averages ratios, define them and their formula. What isthe difference between industry averages ratios and otherratios?

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Hubert KochLv2

26 Jul 2018

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A company has the following ratios: Current ratio: 1.1 to 1.0 Accounts receivable turnover ratio. 8 to 1 Debt/ equity ratio. 9.0 to 1 Interest coverage ratio 7.0 to 1 Inventory turnover ratio 9.0 to 1 The industry averages are: A company has the following ratios: Current ratio: 4.1 to 1.0 Accounts receivable turnover ratio. 8 to 1 Debt/ equity ratio. 4.0 to 1 Interest coverage ratio 9.0 to 1 Inventory turnover ratio 8.0 to 1 Based on the above items, please compare and contrast the ratios between the company and the industry. Please analyze reasons why there could be differences and the overall financial position of the company. Also, what of the ways the company could finance the company without significant negative changes to the above financial metrics (ratios)?

azurehyena165

I need help paraphrasing these 6 sentences

1-The current ratio and quick ratio were a little below the industry average initially. However, the quick ratio fell by a lot while the current ratio fell by just a little. This indicates a build-up in inventory relative to other current assets.

2-All asset management ration were close to the industry averages initially (although the DSO was a little better than the industry average. However, all ratios worsened, with the inventory turnover showing the biggest change, which again indicates a buildup in inventory.

3-All profit margins improved and are comparable to the industry averages.

4- ROE improved because the profit margin improved and the equity multiplier increases, despite the reduction in the total asset turnover ratio. Thus, J&W became more profitable, more leveraged, but less efficient.

5-Common size analysis shows that inventories now make up a greater proportion of assets and that the combined long-term debt and notes payable make up a greater proportion of liabilities & equity. Profits margins have gone up (even though interest expense has also gone up).

6- Percent change analysis shows that sales increased at a rate of 5%, but that several items grew much faster. For example, inventories grew by 50%. Notes payable also grew by a substantial amount. Fortunately, profitability also grew by more than sales. The trend analysis confirms that profitability increased, but the increase in inventories is a red flag.

Standard Industry Classifications, How are you doingcompared to others?

Please do not define SIC CODES OR ACCOUNTS RECEIVABLE as Ialready know what that is. Question 1 is the question. AND PLEASELIST REFERENCES!!!

AND PLEASE LIST REFERENCES!!!

Standard Industry Classification codes (SIC) are used forfinancial statement âbenchmarksâ analysis. Your companyâs financialresults would need to be compared to others. SICs provide theformat to compare a particular companyâs financial data to theirrespective SIC-industry averages.

1. Explain how you would use SIC codes to analyze aCompany Xs Accounts Receivable Turnover of four times per yearversus a SIC rate of eight times per year.