Question
The Sherwin-Williams Company Please help me with the following below. evaluate the companys financial strengths and weaknesses. You can start by comparing the most recent
The Sherwin-Williams Company
Please help me with the following below.
evaluate the companys financial strengths and weaknesses. You can start by comparing the most recent year to the previous two years. You may also evaluate the companys performance compared to its industry data. Finally, you may comment on the strength or weakness of the ratio itself. For example, an ROE of 15% or more is a strong indication of the companys profitability regardless of how it compares to other data. In addition, you should include a common size analysis of your companys income statement. This may provide additional insight for evaluating the companys operating results.
Your overall assessment needs to focus on financial strengths and weaknesses identified, not on one or two poor ratios. This section of the report should be approximately 2-4 pages including the tables.
Financial Ratio | Formula | 2015 | 2014 | 2013 | Comments |
Current ratio | Total Current Assets/Total Current Liabilities | 0.54 | 0.55 | 0.69 | |
Quick ratio | (Cash and Equivalents + marketable Securities + Receivables)/Total Current Liabilities | 0.29 | 0.27 | 0.42 | |
Inventory turnover | Cost of Goods Sold/Average Inventory | 5.63 | 5.95 | 5.74 | For calculating Inventory turnover of year 2013, we need the 2012 inventory levels. For approximation we have used 2013 inventory instead of average inventory levels for year 2013 |
Days sales outstanding (DSO) | Accounts Receivables * Number of days/Total Credit Sales | 38.17 | 40.10 | 42.49 | Here it is assumed that all sales is credit sales as the breakup of credit sales in not given |
Fixed asset turnover | Net Sales/Average net Fixed assets | 10.99 | 10.90 | 9.97 | For calculating Average net fixed assets of year 2013, we need the 2012 fixed assets. For approximation we have used 2013 fixed assets instead of average fixed assets for year 2013 |
Total asset turnover | Net Sales/Average Total net assets | 1.97 | 1.84 | 1.60 | For calculating Average total net assets of year 2013, we need the 2012 net assets. For approximation we have used 2013 net assets instead of averagetotal net assets for year 2013 |
Total debt to total capital | Total Debt/Total Capital | 0.69 | 0.64 | 0.49 |
Times interest earned (TIE) | EBIT/Total Interest Payable | 26.07 | 20.60 | 18.32 | |
Operating margin | EBIT/Revenue | 0.14 | 0.12 | 0.11 | |
Profit margin | Net Income/Revenue | 0.09 | 0.08 | 0.07 | |
Return on total assets (ROA) | EBIT/Total Net Assets | 0.29 | 0.24 | 0.19 | |
Return on common equity (ROE) | Net Income/Shareholder's equity | 1.21 | 0.87 | 0.42 | |
Return on invested capital (ROIC) | (Net Income - Dividend)/ Total Capital | 0.28 | 0.23 | 0.16 | |
Basic earning power (BEP) | EBIT/Total Assets | 0.28 | 0.23 | 0.18 | |
Price/earnings (P/E) | Stock Price/Earnings | Data Needed | Data Needed | Data Needed | Price and No. of shares outstanding data required COULD NOT FIND IN YAHOO FINANCE |
Market/book (M/B) | Market Price/Book Value per share | Data Needed | Data Needed | Data Needed | Price and No. of shares outstanding data required COULD NOT FIND IN YAHOO FINANCE |
ROE | Profit Margin | Total Asset Turnover | Equity Multiplier | |
2015 | 1.21 | 0.09 | 1.97 | 6.62 |
2014 | 0.87 | 0.08 | 1.84 | 6.07 |
2014 | 0.42 | 0.07 | 1.60 | 3.60 |
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