Ration Analysis Memo—Riordan Manufacturing Memo

Riordan Manufacturing, Inc. is a company that produces rather high-tech fictile products. pretty of the products that Riordan produces are Plastic Bottles, fans, heart valves, medical stents, and custom moldable parts. This memo is analyzes pecuniary viability of Riordan Manufacturing, Inc. The first part of the memo will show the calculations for various types of ratio analysis. In addition, on that pose are horizontal and vertical analyses for Riordan?s balance sail and income statement. Lastly, there are definitions and discussions that will show what the liquidity, profitability, and solvency ratios indicate stopping point the financial position of the company; identify which users would be interest in each type of ratio; and what the collected information indicates about the performance and position of the company. Liquidity ratios occurrent ratio live ratio = Current Assets/Current Liabilities= $14,555,092/$6,974,094 = 2.09Acid-test (quick) ratioAcid-test (quick) ratio = Cash + Short-term investments + Receivables ( internet)/Current Liabilities= $305,563 + $283,504 + $6,062,838/$6,974,094 = 0.95Receivables dollar volumeReceivables overturn = network credit sales/Average sack Receivables= $50,823,685/ ($6,062,838 + $5,657,216/ 2) = 8.7 timesInventory turnoverInventory turnover = appeal of Goods Sold/Average Inventory= $42,037,624/$7,850,970 = 5.35Profitability ratios for 2005Asset turnoverAsset Turnover = acquit gross sales / Average Assets= $50,823,685 / [($34,592,182 + $33,856,256) / 2] = 1.5%Profit marginProfit Margin on Sales = Net Income / Net Sales = $1,956,371 / $50,823,685 = 3.

8% ingathering on assetsReturn on assets = Net Income / Av erage Assets= $1,956,371 / [($34,592,182 + $! 33,856,256) / 2] = 5.7%Return on common stockholders? equityReturn on popular Stockholder?s beauteousness= Net Income / Average crude Stockholder?s fairness= $1,956,371 / [($22,115,255 + $21,696,000) / 2] = 8.9%Solvency ratiosDebt to total assets= Debt to total Assets = amount Debt / Total Assets= $12,476,927 / $34,592,182 = 36%multiplication interest earnedTimes Interest earn = Income before Income Taxes and Interest set down / Interest Expense= $3,042,820 / $143,175 = 21.25 TimesHorizontal and vertical... If you penury to get a enough essay, order it on our website: OrderEssay.net

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