Question
Thank you! 1. Summarize the information from the 3 years financial statements, the ratio calculations, and industry comparisons provided in the case to present possible
Thank you!
1. Summarize the information from the 3 years financial statements, the ratio calculations, and industry comparisons provided in the case to present possible solutions to the company's profitability problems. Be sure to conclude with projecting the future success of the company based on your findings.
2. Summary of Luna profitability, including solutions to profitability problems, is thorough and includes substantial explanation and relevant supporting details.
3. Discussion of the future performance of the company is thorough and includes substantial explanation and relevant supporting details.
4. Professional memo format elements are correct and contains no errors.
The Luna profitability date is below
Industry Averages | |||||
2016 | 2015 | 2014 | 2026 | ||
Current | 2.3X | 2.3X | 2.2x | 2.1x | |
Average collection period | 45 days | 46 days | 47 days | 50 days | |
Inventory turnover | 8.3X | 8.2X | 8.1X | 8.3X | |
Fixed asset turnover | 2.7X | 3.0X | 3.3X | 3.5X | |
Total asset turnover | 1.1X | 1.2X | 1.3X | 1.5X | |
Debt ratio | 50% | 50% | 5.0% | 54% | |
Times interest earned | 8.1X | 8.2X | 8.1X | 7.2X | |
Fixed charge coverage | 4.0X | 4.5X | 5.5X | 5.1x | |
Gross profit margin | 43% | 43% | 43% | 40% | |
Operating profit margin | 6.3% | 7.2% | 8.0% | 7.5% | |
Net profit margin | 3.5% | 4.0% | 4.3% | 4.2% | |
Return on assets | 3.7% | 5.0% | 5.7% | 6.4% | |
Return on equity | 7.4% | 9.9% | 11.4% | 11.8% |
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