Explore BrainMass

Explore BrainMass

    Interpreting Financial Ratios of Luna Lighting

    Not what you're looking for? Search our solutions OR ask your own Custom question.

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    See the attached file for the question and table.

    © BrainMass Inc. brainmass.com March 4, 2021, 8:56 pm ad1c9bdddf


    Solution Preview

    Considering the current ratio, it is growing away from the industry average of 2.1 times. This indicates that the firm might be too high in current assets. Current assets include cash and cash equivalents, accounts receivables, and inventory. Drilling down, we see that the average collection period is 45 days versus an industry average 50 days. This indicates that accounts receivables are likely not too high. In addition, inventory turnover is right in line with the industry. As a ...

    Solution Summary

    The solution interprets the financial success of Luna Lighting based upon financial ratio analysis.