Presentation - Overall Health of the Company Overall Health...

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Unformatted text preview: Overall Health of the Company Overall Health of the Company Lebo & Co. Liquidity – Profitability – Current Ratio = 6.36 Quick Ratio = 5.29 Return on Sales = ­1.87% Return of Equity = ­2.39% Inventory Turnover = 15.8 Liquidity – Current & Quick Ratio Very High Profitability – Safe for granting short term credit Activity – Activity – Return on Sales – Very low, no profit, net loss. Return on Equity ­ Very low, no profit, net loss Inventory Turnover – Very high turnover, could mean lost potential sales. Conclusions Conclusions Lebo & Co. Overall Company is not Budgeted for a Profitable Future. Possible Solutions According to Ratios Company Not Profitable Raise Unit Selling Price Cut Expenses Negative Return on Sales Negative Return on Equity Not a Healthy Company Under Current Budgeting ...
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