The profit percentage of assets varies by industry, but in general, the higher the ROA the better. We can see a good trend over years in the company. Comments: Return on equity (ROE) is a measure of profitability that calculates how many dollars of profit a company generates with each dollar of shareholders' equity. The formula for ROE is: ROE is more than a measure of profit; it's a measure of efficiency. A rising ROE suggests that a company is increasing its ability to generate profit without needing as much capital.
Current Ratio 2011 = Current Assets / Current liabilities Gaps Current Ratio = 4,309 / 2,128 = 2.0249 This means that The Gap Inc. is capable of paying its short-term liabilities two times by selling its current assets. What was the current ratio for 2010? How did the current ratio change? Current Ratio 2010 = 3,926 / 2,095 = 1.8739 The current Ratio for The Gap Inc. Increase from 1.8739 to 2.0249 What is the implication of that change? The current ratio increased because there was a considerable increase in Cash and other current assets.
To achieve the objective of serving many customers and acquiring a significant market, share the cash connections embarked to not only meet the financial needs of the company, but the needs to transfer the said funds. Some of the benefits realized by cash connections in applying broad differentiation strategy were as follows: * The company was able to charge a profitable price on its products. * The company was able to attract new customers who were interested in the new as well as the old products. * The company was able to achieve customer loyalty because the new features that differentiated it from other players were of interest to them. Differentiation is not borne out of sheer PR efforts and it is not limited to service and quality.
Investors find this information lucrative because the more expendable cash a company has the more likely they are to pay out in dividends for the stock holders.. Liquidity Ratios: Current assets are a business's total current assets divided by its total current liabilities. Total Current Asset / Total Current liabilities 1,971,000 / 116,290 16.949 = 16.9 Current Ratio- 16.9:1 or 17:1 (16.9 to 1 or 17 to
Cost savings can be computerized accounting programs reduce staff time doing accounts and reduce audit expenses as records are neat, up-to-date and accurate. This system allows them to record business transactions accurately and generate financial reports quickly for management review. However if Rumble carry less transactions this means they won’t need to have computerised accounting system because it is very expensive for them to use. In this case it is best for them to have manual accounting system because it is reliable, cheap and easy to use. They can easily do their transaction without problems.
The basic necessities will always be bought by consumers no matter what the economy is doing. Companies within the sector do not have as much potential for immediate growth but provide steady growth over time. The relevant macroeconomic factors that affect information technology sector are economic, legal/political, technological, socio-cultural, demographic, and international. The economic factors that concern this industry include unemployment, consumer sentiment, and inflation. The consumer staples sector need consumers to be employed: so the consumers will have money to purchase more products.
– ratios in excel spreadsheet 3. What drove the increase in Jones’ accounts receivable and inventory balances in 2005 and 2006? Since they have been financing their business using bank loans, they were able to take on larger workloads, which increased their inventory balances and accounts receivable. 4. Is Nelson Jones’ estimate that a $350,000 line of credit sufficient for 2007 accurate?
the Credit Balance (X) we saw that there is a strong positive slope, meaning that customers who carry a larger credit balance usually will also have higher income as shown in the best-fit line. For linear regression equation we have the following; Income ($1000) = -3.51589 + 0.0119264 Credit Balance($). From this, we can see the B0= -3.51589, which is also the Y intercept, while B1 is 0.0119264 is the slope for this variable. The coefficient of correlation and the coefficient of determination both showed a positive strong relationship between the two variable of Credit Balance (X) and Income (Y). The R^2=86.52%, while R=0.80.
Cash flow is more vibrant and holds to the true value. Cash flow is concerned with the movement of money in and out of a business. The concept of accounting profit can be somewhat narrow with its results only looking at income and expenses at a certain point in time and is taxable. By comparing the information provided from the two reports the free cash flow information from will provide the company with a much truer understanding how the project will be performed. Comparing the company’s net income to its actual cash generated, an investor can determine whether the company is more aggressive or conservative in accounting for its performance.
Outsourcing brings proven benefits in the form of economic leveraging, increase in the quality of products and it provides a number of opportunities to less developed countries. For example in recent times, Americans are overwhelmingly supporting the major retail stores like Wal-Mart, Target and K-Mart. The reason behind this consumer loyalty is that it has become much easier to shop at these locations rather than the local mom and pop stores located on the corner of most neighborhoods. The benefit is that you can purchase everything on your shopping list from one location, saving you time, money and gasoline. In a highly competitive business world, on a firm’s priority list is the subject of increasing profit and reducing cost.