BA 5351 Financial Analysis

BA 5351 Financial Analysis - 1 Liquidity a Over the five...

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1. Liquidity: a. Over the five year period, Majesco Entertainment’s liquidity has stayed about the same. In October 2004, their Current Ratio was 1.31 and in October 2008, the Current Ratio was 1.41, a difference of only .10. They are maintaining their assets and liabilities in roughly proportional amounts over the years in an efficient manner. b. Over the five year period, THQ Inc.’s liquidity has decreased. In March 2004, the Current Ratio was 4.54 and in March 2008, the Current Ratio was 2.32, which is a difference of 2.22. The decrease in Current Ratio is due to the dramatic increases in current liabilities. Asset Management: a. Majesco Entertainment has improved its Asset Management over the past five years. Both the Days’ Inventory and the Days’ Receivables have decreased while the Days’ Payable stayed roughly the same. Therefore the Cash Conversion Cycle is much lower in 2008 than it is in 2004. Majesco Entertainment is selling off its raw materials and generating the cash it needs from accounts receivables to
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BA 5351 Financial Analysis - 1 Liquidity a Over the five...

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