Cango Financial

The financial condition of an organization represents the strategy and structure. However, the use of ratios an individual can assess a company’s abilities to function and grow in an highly competitive market. The ratios and financial statement can be complex, however, financial performance of the organization can be acquired with the execution of performing these ratios from the balance sheets and statements. Most common groups to perform these anglicizes are profit ratios, liquidity ratios, activity ratios, leverage ratios, and shareholder-return ratios. With evaluating the organizations performance, these ratios are compared to the industry average over the history of the firm. When these calculation and ration reveal a deviation

The debt to asset ratio measures the amount of total assets that are financed by creditors instead of investors. It shows what percentage of assets is funded by borrowing compared with the percentage of resources

Debt to equity ratio is related with the capital contributed by creditors and the capital contributed by shareholders. It shows the extent to which shareholder’s equity can fulfill a company’s obligations to creditors. The debt

The quick ratio is a measure of how well a company can meet its short-term financial liabilities. Because inventories are generally the least liquid of an organisation assets a more precise assessment of liquidity may be obtained by excluding inventories from the numerator of the current ratio (Times, 2017, p. 148). See Table II, below with the quick ratio formula and calculations for Wesfarmers.

The Debt to Equity Ratio measures a company’s financial leverage, how much debt a company is using to finance its assets represented in shareholders’ equity. This ratio is important to a potential creditor because it shows the percentage of company financing that comes from creditors and investors. The Debt to Equity Ratio for GAP in 2016 was 1.94 and 1.58 in 2015. The debt to equity ratio for Abercrombie was 0.88 in 2016 and 0.80 in 2015. A lower debt to equity ratio for Abercrombie, being on the decrease, reveal a more financially stable business than for

According to Cleverley, W.O., Song, P.H., Cleverley, J.O, (2011), “Current Ratio is a liquidity ratio that measures the proportion of all current assets to all current liabilities to determine how easily current debt can be paid off’ (p.520). The above chart demonstrated desirable results in the year 2013 for both ratios. In addition, Cleverly et al. defined that the “Quick Ratio is a measure of the organization’s liquidity namely, cash + marketable securities + net accounts receivable/current liabilities” (p.532).

For this question we use quick ratio as our measurement for the solvency ability to know the solvency condition in

In corporate finance, both ratio and financial statement analysis are important tools that can be used in order to assess a company’s strength financially. They can be used in order to forecast a business’ prospective cash flow and ability to grow in the future, as well as a company’s strengths and weaknesses. Income statements, balance sheets, the statement of retained earnings, and the statement of cash flows are the four primary types of financial statements used in corporate finance. All of these financial statements serve to analyze a firm’s

According to Finkler et al. (2007), a debt to equity ratio of 1 indicates liabilities of $1 for each dollar of net asset. As the Total Debt to Equity ratio becomes smaller the future of business operations of the company becomes healthier. Norwalk Hospital maintains this ratio below that of the average in the healthcare industry (average of 3), but is moving up by a small amount. The management team could consider taking a look at 2012 operations and identifying the triggers that moved this ratio higher to

A successful business requires effective planning and financial management. Ratio analysis can improve understanding of the financial results and trends over time, providing key indicators of organizational performance (Demonstrating Value, n.d.). Financial ratios are used by stakeholders including creditors, corporate controllers, accountants, financial analysts, and investors. Analyzing ratios can help determine the liquidity, profitability, debt management, and stability of a corporation. Time series analysis allows users to see where a company has been and where they appear to be going and comparing the ratios to competitors offers insight into the ability to compete and thrive in their markets.

The current ratio is also called the working capital ratio, as working capital is the difference between current assets and current liabilities. This ratio measures the ability of a company to pay its current obligations using current assets. The current ratio is calculated by dividing current assets by current liabilities.

Debt, or financial leverage is the last category of ration analysis used to find the financial condition of a company. Leverage adds risk to the operation of a company because a highly leveraged company would be at a greater risk for bankruptcy than a company that was not. Debt and preferred stock provided good leverage for a company because the interest rate is at a fixed rate. There are two financial leverage measures used to tell whether a company is using financial leverage. Debt ratio is the total liabilities to the total of liabilities and owners equity whereas the debt/equity ratio is the ratio of total liabilities to total owner’s equity. Both of these measures are the same concept but just stated in a different manner.

Financial ratio analysis is a technique for trying to help interpret financial accounts and to determine the intrinsic value of a security by careful examination of key value drivers such as risk, growth, and competitive position. Various ratios can be calculated from the financial accounts. These ratios will then help us to examine the company’s performance over a number of periods by comparing the same ratios in previous years’ accounts and also the accounts of other businesses operating in a similar environment (Most common benchmarks are industry leaders and industry averages).

The debt to asset ratio is a leverage ratio that assesses the amount of total assets that are financed by creditors instead of investors, in other word it measures a company’s

There are loads of tools to measure the performance of a financial performance of an entity but financial ratios is probably the best known tool which is mainly to analyze the performance of an entity by comparing the present to the past relative figures taken or composed from the financial statement . The few categories of ratios are liquidity ratios, profitability ratios, efficiency ratios, debt ratios and market ratios which will be able to describe the entity’s characteristics. Ratios show the true performance and position of the entity. In order for investors to determine their choices of entity to invest in, financial ratios play an important