Question
In 2020, you have been hired as a senior financial analyst for Agile Investment Services. Your team is currently working on an independent assessment of
In 2020, you have been hired as a senior financial analyst for Agile Investment Services. Your team is currently working on an independent assessment of Jordan Import Corporation. This corporation is specialized in importing freshly food from Germany. Your assistant has provided you with the following data for Jordan Import Corporation:
Ratios | 2017 | 2018 | 2019 | 2019 Industry Index |
Long-Term Debt | 0.35 | 0.40 | 0.45 | 0.35 |
Inventory Turnover | 32.25 | 42.42 | 62.65 | 53.25 |
Days Sales in Receivables | 94 | 98 | 113 | 130.25 |
Debt to Equity | 0.90 | 0.85 | 0.75 | 0.88 |
Profit Margin | 0.06 | 0.07 | 0.082 | 0.075 |
Total Asset Turnover | 0.70 | 0.65 | 0.54 | 0.40 |
Quick Ratio | 1.029 | 1.03 | 1.028 | 1.031 |
Current Ratio | 1.15 | 1.21 | 1.33 | 1.25 |
Times Interest Earned | 4.45 | 4.375 | 0.9 | 4.65 |
Equity Multiplier | 1.90 | 1.85 | 1.75 | 1.88 |
In the annual report of Jordan Import Corporation, the CEO wrote, 2017 was a good year with respect to our ability to meet our short-term obligations. We had higher liquidity largely due to an increase in highly liquid current assets.
Required:
As a senior financial analyst at Agile Investment Services, you are required to evaluate:
- If the CEO was right regarding the liquidity of the Jordan Import Corporation.
- The Corporation's asset management.
- The Corporation's solvency and financial leverage.
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