Final Report - Erman_Onur

Final Report - Erman_Onur - MGMT 202 TERM PROJECT Fall 2008...

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MGMT 202 TERM PROJECT Fall 2008 Financial Ratio Analysis Arçelik A.Ş Vestel Beyaz Eşya Sanayi ve Ticaret A.Ş Onur Urunlu 8139 Erman Tatlıoğlu Instructor : Türkan Önder
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1. Ability to pay current liabilities: a. Current ratio Arçelik : = = 1.31 Current ratio Vestel : = = 1.97 Industrial Average: 1.26 Both of the current ratios of Arçelik and Vestel indicates that companies seem that they are able to pay their current liabilities with their current assets. They are both above the industrial average; so it can be said that, in short-term, both companies lookes strong. b. Acid-test ratio Arçelik : = = 0.87 Acid-test ratio Vestel : = = 1.33 Industrial Average: 0.87
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Arçelik’s ratio is below 1 and it indicates that Arçelik won’t be capable of paying all its current liabilites if they were all due short term. This could be due to limited amount of investment; so Arçelik should increase their short term investments. Vestel’s ratio looks pretty well which states that they are capable of paying their current liabilities. 2. Ability to sell inventory and collect receivable: a. Inventory Turnover Arçelik : = = 3.77 Inventory Turnover Vestel : = = 0.57 Industrial Average: N/A Keeping high amounts of inventory is not a good condition for companies. It leads to price deductions, high inventory costs, etc. In our case, Vestel keeps extremely high level of inventory considering the cost of goods sold. On the other hand, Arçelik’s inventory turnover ratio seemds better than Vestel; but it is not optimal. Both companies should try to decrease their inventory level; but with these ratios, in short term, they do not seem to be able to do that. b. Accounts Receivable Turnover Arçelik : = = 2.9
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Accounts Receivable Turnover Vestel : = = 4.07 Industrial Average: N/A Accounts Receivable Turnover ratio measures the number of times that account receivables are collected during a period. Also, it shows that how effective is the company on collecting debts and credits. Hence, if accounts receivable turnover ratio is high, it means that the company is effective on collecting credits. c.
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This note was uploaded on 05/26/2011 for the course MGMT 202 taught by Professor Ahmetkul during the Spring '09 term at Sabancı University.

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Final Report - Erman_Onur - MGMT 202 TERM PROJECT Fall 2008...

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