Ratio Analysis Findings Essay Sample
Ratios are used to analyse fiscal statements to find their profitableness. liduidity and solvency. Liquidity Ratios are used by providers and short-run creditors such as bankers to mensurate the ability of an organisation to pay its maturating short-run fiscal duty. This is besides used to find whether the organisation will be able to run into any unexpected fiscal demand for hard currency. Profitability ratios are used by creditors and investors to measure the gaining power of an organisation. Profitability is used to mensurate the operation success of an organisation for any given clip period. Solvency ratios are used by investors. stakeholders and fiscal analyst to find whether an organisation will be able to last over a long period of clip. The Huffman hauling liquidness ratios reveals that in the twelvemonth 2011 the current assets are greater by about two thousand dollars and the current liabilities are greater in the twelvemonth 2011 as good.
The speedy ratio reveals that the Huffman Trucking Company has more hard currency and histories receivables than the current liabilities. When comparing the twelvemonth 2011 with the twelvemonth 2010 the quick ratio shows an about one thousand dollar difference with the twelvemonth 2011 being greater.
The receivable turnover reveals that Huffman Trucking had an addition in Net Credit Gross saless of about one thousand dollars. The mean net receivables decreased from the twelvemonth 2010 to 2011 about 30 thousand dollars.
The Profitability Ratios: The plus turnover is greater in the twelvemonth 2011 by two thousand dollars. The mean assets stayed the same doing the plus turnover ratio greater in the twelvemonth 2011.
The receivables Turnover revealed the same in the old ages of 2010 and 2011 go forthing the norm being the same.
The net income border reveals that Huffman Trucking’s net income increased about four thousand dollars ; cyberspace gross revenues besides increased by one hundred and 40 1000. The net income border for the twelvemonth of 2011 is 5. 33 % .
The return on assets has increased in the twelvemonth 2011 because Huffman’s Trucking net income increased and entire besides increased.
The return on common stockholder’s equity ratio increased in the twelvemonth of 2011 by one per centum. The shareholder’s equity increased in the twelvemonth of 2011 by about five thousand dollars.
The Huffman Solvency Ratios reveals that the debt to entire assets ratio is less in 2011 than the anterior twelvemonth. Huffman Trucking entire debt increased by about 10 thousand dollars but the entire assets besides increased about 10 1000 every bit good.
The current ratio for 2010 is 1. 62:1 and 2011 was 1. 63:1. The current ratio indicates an addition from 1. 62:1 to 1. 63:1. The current ratio indicates that for every dollar of current liabilities. Huffman Trucking had $ 1. 62 and $ 1. 63 in current assets severally. The speedy ratio for 2010 and 2011 are 1. 57. and 1. 56 severally. The speedy ratio is used to mensurate immediate liquidness of an organisation. The speedy ratios for 2010 and 2011 indicate that Huffman Trucking is extremely liquid. Receivables turnover increased from 11. 9 in 2010 to 21. 4 in 2011. The speedy ratio indicates that Huffman is really liquid and can easy change over certain assets rapidly to hard currency. Asset bend over ratio increased from 3. 71 times in 2010 to 4. 25 times in 2011.
This indicates that Huffman is able to bring forth $ 4. 25 for every dollar it had invested in assets. This indicates that the comapany is a really profitable 1. Profit border decreased from in 2011 by 0. 40 % indicating that for each dollar of gross revenues. there is a 5. 33 % in net income. This is a good mark bespeaking that Huffman is a profitable company. Tax return on common stock holders equity was 56 % in 2011 and 55 % in 2010. This incates that for every dollar invested by the proprietors of the organisation will bring forth 56 % of net income. Times Interest Earned ratio was 202. 83 for 2011 and 116. 14 for 2010. This indicates that Huffman is able to run into involvement payments as they come due. This increases investors assurance in the concern. Debt to entire assets ratio was 60. 48 % for 2011 and 60. 58 % for 2010. This means that creditors have provided 60. 48 % of Huffman’s assets. The above indexs shows that Huffman Tracking is a net income devising organisation. liquid and dissolver.
Mentions
Weygandt. J. J. . Kimmel. P. . . . & A ; Kieso. D. E. ( 2010 ) . Fiscal Accounting ( 7th ed. ) . Hoboken. New jersey: John Wiley & A ; Sons.
