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INTEGRATED CASE APPLICATION:

PART I

REQUIRED (a):

Ratio: 20X2 20X1 20X0


SOLVENCY RATIOS
Quick Asset Ratio 0.6351 0.7946 0.8586
Current Ratio 1.7163 2.0560 2.2034
Debt to Equity Ratio 0.8448 0.7019 0.7037
EFFICIENCY TURNOVERS
Accounts Receivable Turnover 17.4582 times 19.1126 times 18.2307 times
Inventory Turnover 4.1725 times 4.3927 times 4.0357 times
Asset Turnover 1.5484 times 1.5593 times 1.4516 times
PROFITABILITY PERCENTAGES
Return on Sales 2.86% 2.81% 2.11%
Return on Assets 4.15% 4.31% 3.07%
Gross Margin Percentage 29.77% 29.79% 29.51%

REQUIRED (b):

There is a low risk that Pinnacle will fail financially in the next twelve months.
The company has been profitable the past three years, is generating significant
cash flows and most of the ratios indicate no financial difficulties. The current
ratio and debt to equity have deteriorated somewhat, but not enough to cause
significant concerns.

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