Question

Analyze the following ratios. What does the CURRENT RATIO tell about this company? Are the trends...

Analyze the following ratios.

What does the CURRENT RATIO tell about this company? Are the trends getting better or worse? Why or why not? Would you recommend purchase of this stock? Why or why not? Please explain your answers.

Current

2016

2017

2018

Ratio

1.35

1.23

1.25

What does the QUICK RATIO tell about this company? Are the trends getting better or worse? Why or why not? Would you recommend purchase of this stock? Why or why not? Please explain your answers.

Quick

2016

2017

2018

Ratio

1.47

0.96

1.05

0 0
Add a comment Improve this question Transcribed image text
Answer #1

Current ratio = current assets/current liabilities

Higher the current ratio, better it is

There is a mixed trend in the current ratio

Generally a current ratio of 2 is considered good.

I would not recommend the purchase of this stock

As the current ratio is low and the trend is not stable

2.Quick Ratio = Quick Assets/Current liabilities

Higher the quick ratio, better it is

There is again a mixed trend in the quick ratio

Generally a quick ratio of 1 is considered good

Since it is close to 1, I would recommend the purchase of this stock

Add a comment
Know the answer?
Add Answer to:
Analyze the following ratios. What does the CURRENT RATIO tell about this company? Are the trends...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • company A has a current ratio of 2.50 and a quick ratio of 1.25. What can...

    company A has a current ratio of 2.50 and a quick ratio of 1.25. What can you tell me about the company? Is company A better or worse than company B with a current ratio of 3.20 and a quick ratio of 1.25? What else would you need to know to better determine which company is best? justify your response

  • Company A has a current ratio of 2.50 and a quick ratio of 1.25. What can...

    Company A has a current ratio of 2.50 and a quick ratio of 1.25. What can you tell me about company A? Is company A better or worse than company B with a current ratio of 3.20 and a quick ratio of 1.25? What else would you need to know to better determine which company is best? Justify your response.

  • The following are important financial ratios. Explain the trends and meaning behind each ratio for the...

    The following are important financial ratios. Explain the trends and meaning behind each ratio for the given years 2015-2018. SNAP, INC. FINANCIAL RATIOS 2018 2017 2016 2015 LIQUIDITY CURRENT QUICK 5.7259 6.83538769 I 7.9554 0.25391463/ 1.77191442) 1.99548308 4.4322 4.3806 PROFITABILITY GROSS MARGIN RETURN ON ASSETS RETURN ON EQUITY 32.33% -46.2% -54.3% 13.030% -1.0122289 L -1.1513 -11.6638% -30.2836% -38.88% -210.8% -40.523%| -48.799% LEVERAGE RATIOS DEBT TO EQUITY INTEREST COVERAGE 0.2287 0.1744 0.01434511 0.30148847 -110.6235) -1002.1435 -366.37851 - CAPITAL STRUCTURE ASSET TURNOVER...

  • what info does those financial ratios show? comparing ROE ROA current ratio ROA 10.5 7.55 4.84...

    what info does those financial ratios show? comparing ROE ROA current ratio ROA 10.5 7.55 4.84 3.29 2.14 0.56 2016 2017 2018 -2.36 -6.62 Air Asia X Cebu Asiana Airlines ROE 33.28 24.84 21.58 24.66 9.67 2016 2017 2018 -18.94 -38.6 Air Asia X Cebu Asiana Airlines Current ratio 0.74 0.75 0.71 0.65 0.54 0.5 0.45 0.37 0 0 0.34 2016 2017 2018 Air Asia X Cebu Asiana Airlines

  • Required: 1. Calculate the following six (6) ratios: Current Ratio, Quick Ratio, Receivables Turnover Ratio, Inventory...

    Required: 1. Calculate the following six (6) ratios: Current Ratio, Quick Ratio, Receivables Turnover Ratio, Inventory Turnover Ratio, Profit Margin Ratio and Debt to Assets Ratio. Be sure to show the actual calculation as well as your final answer You are only required to calculate the ratios for 2017, however, for two of the ratios (Receivables Turnover Ratio and Inventory Turnover Ratio), you will need data from 2016 for the formula When calculating the Quick Ratio, please note that Short-Term...

  • Requirements 1. Compute the following ratios for 2018 and 2017: a. Current ratio b. Cash ratio c. Times-interest-earned...

    Requirements 1. Compute the following ratios for 2018 and 2017: a. Current ratio b. Cash ratio c. Times-interest-earned ratio d. Inventory turnover e. Gross profit percentage f. Debt to equity ratio g. Rate of return on common stockholders' equity h. Earnings per share of common stock I. Pricelearnings ratio 2. Decide (a) whether Tanfield's ability to pay debts and to sell inventory improved or deteriorated during 2018 and (b) whether the investment attractiveness of its common stock appears to have...

  • 2016-2017 Coca-Cola’s annual report: Gross & Operating profit margin- improved Net profit margin/ROE/ROA -deteriorated Current ratio...

    2016-2017 Coca-Cola’s annual report: Gross & Operating profit margin- improved Net profit margin/ROE/ROA -deteriorated Current ratio - improved Quick and Cash ratio - deteriorated Debt-to-equity - deteriorated Debt-to-capital - deteriorated Interest coverage - deteriorated 2016-2017 Pepsi Cola annual reports: Gross profit margin/Net profit margin/ROE/ROA- deteriorated significantly Net profit margin - deteriorated significantly Current/Quick/Cash ratios - improved Debt-to-equity/Debt-to-Capital ratios - deteriorated Interest Coverage ratio - improved exceeding 2015 Using the financial ratios of 2 companies above 1. Discuss what investors would...

  • Compute the following financial ratios for the company: Current ratio Acid-test ratio (also known as the...

    Compute the following financial ratios for the company: Current ratio Acid-test ratio (also known as the Quick ratio) Operating return on assets Gross profit margin Operating profit margin Net profit margin Total asset turnover (TATO) Fixed asset turnover (FATO) Times interest earned (TIE) Debt ratio Return on equity (ROE) Price/Earnings ratio (P/E) Market/Book ratio 12/31/18 12/31/17 Sales Cost Of Goods Gross Profit Selling & Adminstrative & Depr. & Amort Expenses Income After Depreciation & Amortization Non-Operating Income Interest Expense Pretax...

  • 1. calculate current ratio? 2. calculate the quick ratio of this company? 3. 3. part 3...

    1. calculate current ratio? 2. calculate the quick ratio of this company? 3. 3. part 3 is complete in 2 pictures .. 4. what is compro' debt ratio? 5. 6. what is amount of working capital? 7. what does the working capital of company show? please please solve all 7 part. I really need it. thanks [The following information applies to the questions displayed below.) Shown below are selected data from the balance sheet of Compros, a small electronics store...

  • 1.What do the ratios calculated below communicate about the financial strengths and weaknesses of this company?...

    1.What do the ratios calculated below communicate about the financial strengths and weaknesses of this company? 2.Based on your calculations, would you invest in this Company, why or why not Hlstorical Ratios Projected Ratlo 12/31/17 0.96 0.60 1.20 12/31/18 1.01 0.69 1.19 3.81 16 8.50 3.70 1.10 12/31/19 1.06 0.75 1.21 3.94 17 9.90 3.60 1.34 15 Current Ratio Quick Ratio Debt-to-Total-Assets Ratio Current Ratio Quick Ratic Total Debt-to-Total-Assets Ratio Total Debt-to-Equity Ratio Times-Interest-Earned Ratio Inventory Turnover Fixed Assets Turnover...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT