HW3 - CEE 498 HW 3 1) Quick Ratio = Total Quick Assets /...

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CEE 498 HW 3 1) Quick Ratio = Total Quick Assets / Current Liabilities 943,846/632,124 = 1.493 > 1 good liquidity. Current Ratio = Total Current Assets / Total Current Liabilities 994,290/632,124 = 1.573 > 1 good liquidity. Collection Period = (Accounts Receivable*365) / Annual Sales Revenue ((321,258 + 2439)365) / 1,825,499 = 64.7 > 60 days collection period is longer than desired but very close Net Profit/Tangible Net Worth = 144,067/(1,022,478 – 632,124) = 36.9% Net Profit/Total Assets = 144,067/1,022,478 = 14% Net Sales/Tangible Net Worth = 1,825,449/(1,022,478 – 632,124) = 4.67 Net sales/Working Capital = 1,825,449/(994,290 – 632,124) = 5.04 General & Administrative Expenses/Tangible Net Worth 363,421/ (1,022,478-632,124) = .931 Fixed Assets/Tangible Net Worth = 28,188 / 390,354 = 7.2% Total Liabilities/Tangible Net Worth = 632,124 / 390,354 = 1.62 Hard Debt/ Tangible Net worth = 100,00 / 390,354 = .256 Five of the 11 ratios are outside of their desired ranges. I would say that this company is in a moderate to questionable financial position because a few of the ratios are only off by a little bit and would require only slight tweaking to fix. The Net Sales/Tangible Net Worth ratio shows a value of 4.67 which falls outside of the desired range of 10-15.
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This note was uploaded on 04/25/2010 for the course CEE ID taught by Professor Russeljeffries during the Spring '10 term at Wisconsin.

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HW3 - CEE 498 HW 3 1) Quick Ratio = Total Quick Assets /...

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