Ratio Analysis
By: Joaquin Castrillo
Eliezer Aldarondo
at
ed
Current Ratio
1.38
1.89
3.77
1.94
Quick Ratio
0.81
1.11
2.33
1.16
Debt Ratio
41%
22%
10%
23%
6%
9%
15%
10%
Return on Assets
13%
17%
27%
20%
Return on Equity
22%
21%
29%
25%
Average Collection Period
45.63
36.32
33.18
38.08
Average Days of Inventory
63.27
60.83
66.79
63.49
Return on Sales
Co
n
so
l
Di
vi
si
on
id
C
Di
vi
si
on
B
Di
vi
si
on
A
Ratio Chart
Ratio Comparisons
35%
30%
25%
20%
Division A
Division B
Division C
15%
10%
5%
0%
Return on Sales
Return on Assets
Return on Equity
Liquidity Ratios
Current & Quick Ratios:
-There is an increase in all three ratios
meaning that the company’s ability to pay short
term debts increased.
-Decreasing numbers in these numbers could
make the company go bankrupt
Long Term Solvency Ratios
Debt Ratio:
- This ratio is decreasing in every one of the
divisions meaning that the total debt of the
company is decreasing as well.
-This is a positive trend for the company since
we can see that the company has smaller and
smaller debts to pay.
Asset Management Ratios
Average Collection Period:
- These ratios seem to be in a decreasing trend
which in our case is positive. In division A we can
see that the time the company had to wait in order
to get their accounts receivable was more than a
month but in Division C we can see that the
amount of time has decreased to approximately a
month, which is a very respectable time to wait.
Days Sales in Inventory:
- These ratios seem to be in a stable trend
which is a positive sign. This means that the
amount of inventory that the company is getting is
a good amount and it is being sold in a good
amount of time.
- High numbers of inventory might mean that
the company’s products are obsolete or they are
not selling the products.
The End