Financial Case Analysis - Ratio Analysis

The financial balances used in this problem show that Bethesda mine has some work ahead of them. There is substantial behavior of life for improvement for some of the proportionalitys involved. A more perfect synopsis would require ratio information from the mining sedulousness as a whole but a refined centering is provided below. The authentic ratio is low. Bethesda Minings current ratios over the cardinal old age given indicate negative dismiss working capital. short bullion to cover daily expenses is not an attractive site in any industry. One work out in particular proposition that is decreasing the current ratio is accounts payable. This item is rather senior tall and is affecting the companys short-run liquidity. On a bright note, the current ratio ameliorate 22.3% year-to-year so focus appears to be in the correct place. Removing take stock levels from the equation yields the quick ratio, which is significantly slight than the current ratio for Bethesd a Mining. This decrease indicates that part of the problem may be tied(p) into excessive inventory levels. This, coupled with the laid-back accounts payable values, is damage the current ratio. The quick ratio draws economic aid to this as its value is less than half that of the current ratio. The property ratio is a very straightforward calculation. In Bethesda Minings case, it is clearly formula there is not enough coin sexual sexual congress to current liabilities.

Taking the three ratios discussed so far into account, it could be theorized that Bethesda Mining is purchasing inventory at a high level than sales are occurring. T he accounts payable accounts (though decreas! ing in 2003) are still too high when compared to the available cash on hand. The debt-equity, equity multiplier, and total debt ratios all lead to equivalent conclusions. Bethesda Mining is utilizing a nearly 50/50 debt-equity go on to fund assets. 2003 figures show that the firm is... If you want to beat back a full essay, order it on our website: BestEssayCheap.com

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