Purchase Solution

Analyze liquidity/solvency/profitability with financial data

Not what you're looking for?

Ask Custom Question

Use the attached file.

1. Evaluate the liquidity position of Jackson relative to that of the average firm in the industry. Consider the current ratio and the quick ratio for Jackson. What problems, if any, are suggested by this analysis?

2. Evaluate Jackson's performance by looking at key asset management ratios. Are any problems apparent from this analysis?

3. Evaluate the financial risk of Jackson by examining its times interest earned ratio and its equity multiplier ratio relative to the industry average ratios.

Attachments
Purchase this Solution
Solution Summary

This solution discusses classic ratios used to analyze liquidity, solvency, profitability and productivity (turnover or days) for a sample company based on their income statement and balance sheet.

Here are the ratios discussed:

Current ratio
Quick ratio
Average collection period (365-day year)
Inventory turnover ratio
Total asset turnover ratio
Times interest earned ratio
Net profit margin ratio
Return on investment ratio
Total assets/stockholders' equity (equity multiplier) ratio
Return on stockholders' equity ratio
P/E ratio

Discussion is 631 words.

Solution provided by:
Carol Sargent, PhD
Education
  • BSc, University of Virginia
  • MSc, University of Virginia
  • PhD, Georgia State University
Recent Feedback
  • "hey just wanted to know if you used 0% for the risk free rate and if you didn't if you could adjust it please and thank you "
  • "Thank, this is more clear to me now."
  • "Awesome job! "
  • "ty"
  • "Great Analysis, thank you so much"
Purchase this Solution
Free BrainMass Quizzes
Six Sigma for Process Improvement

A high level understanding of Six Sigma and what it is all about. This just gives you a glimpse of Six Sigma which entails more in-depth knowledge of processes and techniques.

Basics of corporate finance

These questions will test you on your knowledge of finance.

Situational Leadership

This quiz will help you better understand Situational Leadership and its theories.

Change and Resistance within Organizations

This quiz intended to help students understand change and resistance in organizations

Introduction to Finance

This quiz test introductory finance topics.

View More Free Quizzes
Related BrainMass Solutions

  • Analysingf financial statements of Pepsi & coco cola

    256724 Analyzing financial statements of Pepsi & coco cola Analyzing Financial Statements a) Select two competing companies (publicly traded) to analyze for the most recent year financial data is available.

  • Delta Airlines and Southwest Airlines - company analysis

    (a) Select two competing companies (publicly traded) to analyze for the most recent year financial data is available.

  • Tools for analyzing financial statements

    Ratio analysis is used for doing : 1) Profitability analysis 2) Liquidity analysis 3) Solvency analysis 4) Asset management analysis Financial ratios depict relationship between two or more financial numbers / data of the organization.

  • Google's Financial Condition

    Financial ratios depict the relationship between two or more financial numbers / data of the organization. It is a useful tool to analyze the performance of the organization.

  • Prime Company's Performance Summary

    I need assistance preparing a performance review I've attached some financial figures and additional company info. Please explain how I would analyze the data for this company.

  • Analysis of financial statements of Intel Company

    Perform horizontal and vertical analysis, selected liquidity, profitability, and solvency ratios, and other selected financial ratios.

  • Liquidity, asset utilization, long-term solvency ratios

    Response is attached This provides the steps to compute and interpret Quickfix's liquidity, asset utilization, long-term solvency, and profitability ratios

  • Financial statement analysis

    222857 Which category of financial ratio (liquidity, profitability, or solvency) is the most important when conducting financial analysis? What items should be considered in a financial statement analysis?

  • Financial analysis of Wal-Mart compared to Target

    Target and Wal-Mart both have better liquidity then industry average. Target has the best liquidity. Solvency ratios measure the long term solvency of the organization. Lower debt equity ratio indicates lower financial risk.

  • Compute and compare 14 financial ratios

    207285 Black & Decker and Snap-On Tools" compute and compare 14 financial ratios Please find attachment for the Problem Selected Financial data for Black & Decker and Snap-On Tools for 2004 are presented here (in millions) Please see the attached file

View More Related Solutions