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Ratio analysis, overall financial condition and performance

See attached Vanguard file.

1. Calculate the firm's 2007 financial ratios.

2. Prepare an executive summary on the firm's overall financial condition and performance.

Comment on the meaning of each ratio, discussing its trend and its comparison to the industry average.


Solution Preview

See attached Excel file for the ratio calculations.

Current ratio shows the ratio between the current assets and current liabilities and shows the ability of the company to meet its current liabilities out of its current assets. The liquidity position of the company is sound as it is maintaining the constantly the current ratio of around 1.6 and it is also at par with the industry average of 1.6. Further, quick ratio is also one of the ratios to assess the soundness of the liquidity position of the company. The quick ratio is also at par with the industry average of 0.9.

However, inventory turnover of the company is lesser than the industry average of 8.4 which indicates that the ...

Solution Summary

Ratio analysis, overall financial conditions and performance are examined.