Accounting Project: Current Ratio Essay Sample
In this undertaking. you will measure the fiscal wellness of the concern in inquiry. utilizing fiscal analysis tools in your text edition. Please do your work neat and demo all calculations. For some of your calculations. you will be comparing your consequences with norms of concerns within your business’s industry. For aid in obtaining industry norms. see the Reference Desk at the library. Attach the sheet ( s ) obtained which show industry norms to this paper. In some instances. the industry averages sheet may non hold the specific ratio. but you may be able to calculate the ratio utilizing the information on the industry mean sheet. If no industry norm is given. but you are able to calculate the industry norm. please do so. What is the name of the concern you are describing on? Hershey Company|
A popular analysis technique is a tendency analysis ( besides known as Horizontal Analysis ) . in which you analyze the alteration over clip of specific fiscal information. This is shown on page 694 of your text edition. Mention to your income statement. fix a tendency analysis of Gross saless and of Net Income ( or Net Loss ) for all the old ages reported. Besides. province what page in your one-year study has your income statement. 2011 2010 2009Sales $ 6. 080. 788 +7 % $ 5. 671. 009 +7 % $ 5. 298. 668Net Income $ 628. 962 +23 % $ 509. 799 +17 % $ 435. 994Pg. 78In your sentiment. are the tendencies in Gross saless and Net Income good or bad? Please briefly explicate your sentiment. Both sale and net income tendencies are good. Both tendencies addition from 2009 to 2010 every bit good as 2010 to 2011 demoing that gross revenues and net income are increasing. |
The Current Ratio is defined on page 59. Please give a brief definition of the current ratio here. Current Ratio is the current assets divided by current liabilities. It is liquidity ratio that measures a company’s ability to pay short-run duties.
From the balance sheet. calculate the current ratio for all old ages presented.
2011: $ 2. 046. 558/ $ 1. 173. 775=1. 7 2010: $ 2. 005. 217/ $ 1. 298. 845=1. 5| What is the industry norm for the current ratio? . 6| Is your company’s current ratio weak or strong? Briefly explicate your sentiment. My company’s current ratio is really strong compared to the industry norm. It is really strong in 2010 but it is even stronger in 2011. This shows that Hershey company is able to pay short-run duties rapidly. |
The Debt to Total Assets Ratio is defined on page 60. Please give a brief definition of the debt to entire assets ratio here. Debt to Total Assets Ratio is entire liabilities divided by entire assets. It measures the per centum of entire funding provided by creditors instead than shareholders. | From the balance sheet. calculate the debt to entire assets ratio for all old ages presented. 2011: $ 4. 412. 199/ $ 3. 539. 551=1. 2 2010: $ 4. 272. 732/ $ 3. 335. 131=1. 3| What is the industry norm for this ratio? . 82| Is your company’s current ratio weak or strong? Briefly explicate your sentiment. My company’s current ratio is weak. The per centum has decreased from 2010 to 2011 which is good because that means that liabilities have decreased compared to assets but the ratio is still good about that of the industry norm. Meaning that the Hershey Company has more liabilities compare to assets than that of the mean company in this industry. |
The Profit Margin Ratio is defined on page 247. Please give a brief definition of the Profit Margin ratio here. Profit Margin Ration is the net income divided by net gross revenues. It measures the per centum of each dollar of gross revenues that consequences in net income| From the income statement. calculate the Profit Margin ratio for all old ages presented.
What is the industry norm for this ratio? 5. 5 % | Is your company’s net income border ratio weak or strong? Briefly explicate your sentiment. For all three old ages Hershey’s ratio was higher than that of the industry norm. It remained the same between 2009 and 2010 but it did increase from 2010 to 2011. This shows that the net income for the Hershey Company is increasing.
The Inventory Turnover Ratio is defined on page 296. Please give a brief definition of the Inventory Turnover ratio here. Inventory Turnover Raito is the Cost of goods sold divided by mean stock list. This indicates how rapidly a company sells its goods during the twelvemonth. From that you can find how many yearss the merchandise is in the stock list by taking 365 divided by the stock list turnover ratio. | From the fiscal statements. calculate the Inventory Turnover ratio. and the Days in Inventory. for the most recent twelvemonth presented. 2011 Turnover Raito 2011 Days in inventory $ 3. 548. 896/ $ 648. 953=5. 5 times 365/5. 5=66 yearss | What is the industry norm for this ratio? Industry Turnover 6. 9| Is your company’s stock list turnover ratio weak or strong? Briefly explicate your sentiment. The Inventory turnover ratio for Hershey is good. They sell their mean stock list sum more frequently that the industry norm. The Hershey Company sell’s their stock list on an norm of 66 yearss.
