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Big Lots Financial Ratios Paper

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Big Lots Financial Ratios 1. Cash Ratio 51,164/678,595 = 0.08 It is important for Big Lots to have a sufficient amount of cash on hand in order to successfully operate their business. The cash ratio for Big Lot’s for the year 2017 is 0.08. This cash ratio indicates that Big Lots has 8 cents for each dollar of current liabilities and should have enough cash on hand to pay their employees and take care of all of their other obligations to creditors sufficiently (Bethel University, 2017). 2. Current Ratio 994,379/678,595 = 1.47 Big Lots have a current ratio of 1.47 which is larger than 1 and indicates that they would have adequate funds available to pay their short-term obligations. With Big Lots having a current ratio of $1.47 for each dollar in current liabilities would indicate that they are maintaining their total current assets favorably to cover their current liabilities that are due …show more content…

Big Lots will want to see an increase in this number each year to be indicative of their profitability. The company should try to maintain an average inventory turnover ratio around the same amount each year and try not to let this number increase too high to avoid the possibility of losing sales due to unavailability (Bethel University, 2017). 6. Return on Equity 152,828/650,630 = 0.23 x 100 = 23.49 The return on equity ratio for Big Lots is 23.49 percent and is a statement of how much Big Lots earned from money invested by their owners. It also implicates that for Fiscal Year 2017, Big Lots earned on the average 23 cents of every dollar of equity their investors contributed to the business. Big Lots will need to check their return on equity ratios for previous years in order to determine whether or not they are in good standings with their returns (Bethel University, 2017). 7. Net Profit Margin 152,828/5,200,439 =

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