157_634721677028245224_Freds_Fine_Lingerie_and_Harley_Shoppe

98 10300000 current ratio 9960000 8840000 117 normally

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Unformatted text preview: 0.00 ÷ $88,400.00 = 1.17 Normally a current ratio this low would signal cash flow problems, but since the current portion of the note payable of $25,000 is not due until December 31st of 20x0 and the amount in inventory is not very high, this company will be able to meet its current obligations. ROA $39,200.00 ÷ $39,200.00 ÷ (($226,000 + $238,000)/2) = $232,000.00 = 0.1689655 = 16.90% Management is earning 16.90% on the assets in which they have invested. To determine whether is rate is good or is too low, we would need to compare it to the ROAs of other companies in this industry(ies). ROE $39,200.00 ÷ $39,200.00 ÷ (($76,000 + $99,600)/2) = $87,800.00 = 0.4464692 = 44.65% An ROE of 44.65% is superb!! There are not many investments that have a return this high. Management is doing a great job with th...
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