Trademark corps financial manger collect the following information for its peer group to compare its performance against that of its peers.
Ratios trademark peer group
dso 33.5 days 27.9 days
total assets turnover 2.3 3.7
inventory turnover 1.8 2.8
quick ratio .6 1.3
a. Explain how trademark is doing relative to its peers.
b. How do the industry ratios help trademark management?
Solution Preview
a.
- DSO is Days of Sales Outstanding; a low number would reflect fewer number of days for the company to collect on Account Receivables. A higher number is an indicator that the company is selling to customers on credit and it's taking longer to collect from the sale.
-Trademark's 33.5 days compared to 27.9 for their peers may be a red flag, particularly as many companies require payment within 10 days, and after 10 days, apply interest which continues to accrue until it is paid. It is typically in a company's best interest to have a quick turn-around on AR, so that they have cash to operate and grow their business.
Assets Turnover is the Avg. of total assets and revenue generated. Asset turnover is generally looked at quarterly or annually and shows how ...
Solution Summary
Industry ratios and turnover are defined, along with examples and comparisons.
...compare Reed's results with industry averages. What do these ratios indicate? Liquidity Ratios Industry Current ration 2.7 Quick ratio 1.6 Receivables turnover...
... Using the data in the chapter, compare Nordstrom's liquidity ... than Sears and other firms in the industry. ... solution computes the four liquidity ratios and then ...
... Calculate and analyze the following thirteen financial ratios of the corporation and compare them to the appropriate industry average: â—¦Current ratio...
...compare with its competitors in the industry. ... The retail industry has. 2.4 total asset turnover ratios in which Wal-Mart covered 0.23 in 2011 and 0.232 in 2012. ...
... as the company is already highly levered and also the company has low profitability ratios compared to other ...Industry Averages for Key Ratios: Net profit ...
... 2,035 QUESTIONS 1. Calculate a few ratios and compare Reed's results ... (Some industry averages are ... The liquidity ratios are the ratios that are used to measure ...
... Calculate a few ratios and compare Reed's results with industry averages. ... The liquidity ratios are the ratios that are used to measure the company's ...
... and 2005 financial statements follow, along with some industry average ratios. ... Corrigan's liquidity position, and determine how it compares with peers ...
