LIQUIDITY ANALYSIS Liquidity ratios are the ratios that measure the ability of a company to meet its short term debt obligations. These ratios measure the ability of a company to pay off its short-term liabilities when they fall due. The liquidity ratios are a result of dividing cash and other liquid assets by the short term borrowings and current liabilities. They show the number of times the short term debt obligations are covered by the cash and liquid assets. If the value is greater than I, it means the short term obligations are fully covered.
A firm like EYSI itself that has a quick ratio of less than 1 cannot presently fully pay back its current liabilities. 3.3. GEARING (AIA, 2012) stated that the gearing ratio assesses the amount of borrowing compared to shareholder’s investment and indicates the decisions made by management on how funds are raised, either borrowing or raising new equity. (WJEC, 2012) explained that a gearing ratio that is above 80% is considered very high, 60 to 80% is considered high, and below 40% is considered low. When there is high gearing, the profits available to shareholders are reduced due to interest paid on loans.
1. Liquidity Ratios: This ratio used to measure the company's ability to pay off its short-term debts as they come due by using the company's current or quick assets, • Current ratio= current assets current liabilities AVP= 1.34 ULTA= 2.9 REVLON= 15.86 • Quick ratio = ( current assets - inventory) current liabilities AVON= .94 ULTA= 1.12 REVLON= 15.26 The safe rate for current ratio is 1 or up, that means the current assets can cover the current liabilities, we see that the current ratio for AVP is 1.34 which means it is it has ability to cover the current liabilities once they become due. Quick ratio refers to the company ability to use its cash or cash equivalent to pay its current liability without using its inventory, Avon Products company
If so, how much? On what financial statement did you find this? In fiscal 2008, Nike’s board did declare a cash dividend of $0.0875 per common share. This was found in the consolidated statement of income and also the consolidated statement of cash
The cash ratio is the number of times that the company could meet its current obligations to its current cash balances. The higher the reserve ratio, the more likely a company will be able to pay its short-term debt. Shortly before failure, companies often have very low cash reserve ratio, low levels of inventories, receivables and relatively low current high ratios. Therefore, analyze that Bayou is lays on which position (Henderson et al.,
It makes a resistance to the dominant value of race. Nike is a pioneering company of adventurous spirit, which show the image of rebellious by opposing the authority. It encourages confrontation and is innovative use the black as the spokesperson to represent the athletic wear company. The development of basketball in the United States always has a dispute over discrimination. In the 1970s and the 1980s, the average salary of African-American basketball players was about 20% lower than the whites players.
Total debt also increased to €16.5 billion in 2014 from €15.6 billion in 2013. The decrease in current liabilities resulted from a significant decline in its financial liabilities to €1.9 billion from €2.9 billion (-36.0 percent), despite increases in trade payables (+24.98 percent), other liabilities (+13.6 percent), and income tax liabilities (+42.9 percent). Conversely, the increase in noncurrent liabilities resulted primarily from increases in provisions for pension and similar obligations (+52.9 percent) and other liabilities (+41.1 percent) despite the cut in deferred tax liabilities (-4.9 percent) and a decline in financial liabilities (-6.9 percent). Liquidity ratios indicate strictly controlled annual liquidity levels with strong reliance on leverage (around 30 percent of current assents) for its cash needs. Current ratio [current assets/current liabilities], the least conservative of the liquidity measures, is 0.7 both in 2014 and 2013 (Weiers, 2014).
Nike compete internationally with a significant number of athletic and leisure footwear companies, athletic and leisure apparel companies, sports equipment companies, and large companies having diversified lines of athletic and leisure footwear, apparel, and equipment, including adidas, Puma, Li Ning, and Reebok, among others. The intense competition and the rapid changes in technology and consumer preferences in the markets for athletic and leisure footwear and apparel, and athletic equipment, constitute significant risk factors in Nike operations. Currency Volatility: Since the majority of Nike’s sales are generated outside of the United States, the company is exposed to significant currency fluctuations. The recent strengthening of the U.S. Dollar has hurt reported results, due to the foreign amounts being translated into U.S. dollars for reporting purposes. While Nike does have certain hedges in place, they are designed to lessen the impact of unfavorable exchange rates, not fully eliminate the risk.
nterpreting 'Receivables Turnover Ratio' A high receivables turnover ratio can imply a variety of things about a company. It may suggest that a company operates on a cash basis, for example. It may also indicate that the company’s collection of accounts receivable is efficient, and that the company has a high proportion of quality customers that pay off their debts quickly. A high ratio can also suggest that the company has a conservative policy regarding its extension of credit. This can often be a good thing, as this filters out customers who may be more likely to take a long time in paying their debts.
The current ratio is a liquidity and efficiency ratio that measures a firm's ability to pay off its short-term liabilities with its current assets. In the year 2012, KHB had a current ratio of 1.688 but it comes to decrease in 2013 to a 1.642. The ratio in the year 2014 was 1.670 indicating a slight increase. The competitor of KHB, the PMMB had a current ratio of 4.785, 4.012 and 3.622 from the year 2012 to 2014 respectively. A current ratio should be more than 2.0 as a higher current ratio indicates a more promising current debt payments.