Accounting

Ratio Analysis Memo ACC 291 11/5/2012 admission While sounding over the financial statements of Huffman Trucking , team up A persuasion that you, the CEO, world power be evoke in our findings. number 1, we allow contemplate the runniness, profitability, and solvency symmetrys and explain how they relate to the ships friendships financial position. Then, we will interpret into which users might be touch oned in for each one type of dimension. Finally, we will converse what the data reveals about the conjunctions performance and position. Ratios First allows shew the liquidity, profitability and solvency ratios. The liquidity ratio measures the the short-term ability of the company to pay its maturing obligations and to meet unannounced needs for cash.(Weygandt, Kimmel, &type A; Kieso, 2010). We utilise the current ratio, Acid-test ratio, receivable turnover, and inventory turnover to show the liquidity. Now, lets look at the profitability ratios. The profitability ratios make up of summation turnover, profit margin, return on assets, and return on greenness stockholders equity. The profitability ratios argon a way the trading to tax its ability to generate earnings. Finally, we used the Solvency ratios. The debts to total assets and multiplication interest earned were used to measure the ability of the company to bring home the bacon over a long period of time.

(Weygandt, Kimmel, & Kieso, 2010). Users The users that might be interested in each ratio would be suppliers, lenders, managers and customers, and employees. The suppliers atomic number 18 going to command to see the liquidity of the company. They destiny to make s ure that they will draw in remunerative f! or the supplies that Huffman uses from them. The lenders are also going to be interested in if the company can pay back its debts. They do not exigency to give Huffman Trucking a loan if they are not going to be able to pay them back. Managers and customers want to see profitability. Managers want to see it to ensure that they will go after to have employment and customers want to see that they...If you want to exit a full essay, order it on our website: OrderEssay.net

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