Question
You have been hired as an analyst for Bank of WA and your team is working on an independent assessment of FandB Inc. (F&B), which
- You have been hired as an analyst for Bank of WA and your team is working on an independent assessment of FandB Inc. (F&B), which is a firm that specializes in the production and distribution of food and beverage products in Australia. Your assistant has provided you with the following data about the company and its industry. You analysis should include intra-company, inter-company, and industry benchmark comparison.
- If current liabilities of the company was 3.28 million in 2018 and daily cash expenditure was 0.021million, using the data provided in the table, calculate the defensive interval ratio.
| Ratio | 2018 | 2017 | 2016 | 2018 | |
| Competitor | Industry Average | ||||
| Long-term debt | 0.45 | 0.40 | 0.35 | 0.52 | 0.35 |
| Inventory Turnover | 62.65 | 42.42 | 32.25 | 46.30 | 65.75 |
| Days sales in receivables | 113 | 98 | 94 | 121 | 100.25 |
| Debt to Equity | 0.75 | 0.85 | 0.90 | 0.85 | 0.88 |
| Profit Margin | 0.082 | 0.07 | 0.06 | 0.075 | 0.12 |
| Total Asset Turnover | 0.60 | 0.65 | 0.70 | 0.80 | 0.55 |
| Quick Ratio | 1.028 | 1.03 | 1.029 | 1.10 | 1.16 |
| Current Ratio | 1.33 | 1.21 | 1.15 | 1.20 | 1.25 |
| Interest coverage Ratio | 0.9 | 4.375 | 4.45 | 4.20 | 4.65 |
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Financial Accounting
Authors: Robert Kemp, Jeffrey Waybright
2nd edition
978-0132771801, 9780132771580, 132771802, 132771586, 978-0133052152
