Question
Using three years of ratios and information about Delta company, describe in a 2-3 page paper whether your companys performance or position has improved over
Using three years’ of ratios and information about Delta company, describe in a 2-3 page paper whether your company’s performance or position has improved over the three-year period or has grown worse. Your explanation should refer to the patterns in the ratios as well as to changes in the financial statement items that are part of the ratio. Your analysis will draw from the ratios, the financial statements, management’s discussion in the annual report and other sources as needed to help explain what you observe in the ratios.
| Delta | |||||
| Account receivable turnover | 2015 | 2016 | 2017 | ||
| Account receivable | 2020 | 2064 | 2377 | ||
| Sales | 40704 | 39639 | 41244 | ||
| Sales/account receivable | 20.15 | 19.20 | 17.35 | ||
| Average collection period | |||||
| debtors/sales*365 | 18.11 | 19.01 | 21.04 | ||
| Current ratio | |||||
| Current assets | 9056 | 7451 | 7844 | ||
| Current liabilities | 17526 | 15239 | 18573 | ||
| Current ratio= CA/CL | 0.52 | 0.49 | 0.42 | ||
| Debt to equity ratio | |||||
| Debt(Current liabilities + non current liabilities) | 42284 | 38974 | 39382 | ||
| Equity | 10850 | 12287 | 13910 | ||
| Debt/Equity | 3.90 | 3.17 | 2.83 | ||
| Inventory turnover | |||||
| Inventory | 379 | 519 | 916 | ||
| COGS | 6544 | 5133 | 5733 | ||
| COGS/Inventory | 17.27 | 9.89 | 6.26 | ||
| Average inventory days Outstanding | |||||
| Inventory/COGS*365 | 21.14 | 36.91 | 58.32 | ||
| Return on assets in % | |||||
| Net income | 4526 | 4373 | 3577 | ||
| Total assets | 53134 | 51261 | 53292 | ||
| Net income/total assets | 8.52 | 8.53 | 6.71 | ||
| Return on equity in % | |||||
| Net income | 4526 | 4373 | 3577 | ||
| Equity | 10850 | 12287 | 13910 | ||
| Net income/equity*100 | 41.71 | 35.59 | 25.72 | ||
| Return on Investments: (Investment revenue-Investment cost)/Investment Cost | 26.2 | 22.63 | 15.40 | ||
| |||||
| Net income | 4526 | 4373 | 3577 | ||
| Fixed assets+net working capital | 14569 | 16587 | 15834 | ||
| Net income/FA +net working capital | 31.07 | 26.36 | 22.59 | ||
| Profit margin in % | |||||
| Net income | 4526 | 4373 | 3577 | ||
| Sales | 40704 | 39639 | 41244 | ||
| Net income/sales | 11.12 | 11.03 | 8.67 | ||
| Asset turnover | |||||
| Total assets | 53134 | 51261 | 53292 | ||
| Sales | 40704 | 39639 | 41244 | ||
| Sales/Total assets | 0.77 | 0.77 | 0.77 |
Step by Step Solution
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Step: 1
Based on the provided ratios and information about Delta company over a threeyear period we can analyze whether the companys performance or position has improved or worsened Here is an analysis of the ...
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Interpreting and Analyzing Financial Statements
Authors: Karen P. Schoenebeck, Mark P. Holtzman
6th edition
132746247, 978-0132746243
