Identify techniques of planning such as financial ratios, cost of money over time, net present value and other financial techniques, with the following information
Financial Analysis of MCMHC
Current Ratio(2019 & 2018)----1.66 &
1.54
Days Cash on Hand (2019 & 2018)—
27.19 &16.34
AR(2019&2018)-25.87 &26.63
Total Margin(2019&2018)-6% &9%
ROA-(2019 &2018)-7.6%&12.2%
ROE-(2019&2018)-8.8%&14.2%
Debt Ratio(2019&2018)—13.7% & 14.0%
Total Asset Turnover(2019,2018,2017, &
2016)---1.26,1.35,1.58,& 1.90
The current ratio provides the ratio of net current assets to current liabilities. It has improved from 1.54 to 1.66 and hence there is more assets to pay for current liabilities.
Days cash on hand is the number of days the cash balance can be used to pay for daily operations. It has also increased from 16.34 to 27.19 therefore providing a better liquidity position
AR or account receivables have slightly decreased which is good as the credit sales may have decreased or the creditors may have returned money.
Total Margin is net income/Sales or revenue. It has decreased from 9% in 2018 to 6% in 2019 which is a cause for concern as the profitability has decreased.
Return on asset (ROA) and Return on equity (ROE) have decreased which follow from lesser profitability
Debt ratio has slightly decreased which is better as there is a higher solvency.
Total asset turnover indicates that there is lesser profitability over the years and it is cause for concern for the firm
Identify techniques of planning such as financial ratios, cost of money over time, net present value...