Ration Analysis Memo—Riordan Manufacturing Memo

Riordan Manufacturing, Inc. is a company that produces rather high-tech fictile products. slenderly of the products that Riordan produces are Plastic Bottles, fans, heart valves, medical stents, and custom waxy parts. This memo is analyzes pecuniary viability of Riordan Manufacturing, Inc. The first part of the memo willing show the calculations for various types of ratio analysis. In addition, on that target are horizontal and vertical analyses for Riordan?s balance carpenters plane and income statement. Lastly, there are definitions and discussions that will show what the liquidity, profitability, and solvency ratios indicate next the financial position of the company; identify which users would be implicated in each type of ratio; and what the collected info indicates about the performance and position of the company. Liquidity ratios occurrent ratio flow ratio = Current Assets/Current Liabilities= $14,555,092/$6,974,094 = 2.09Acid-test (quick) ratioAcid-test (quick ) ratio = Cash + Short-term investments + Receivables ( internet)/Current Liabilities= $305,563 + $283,504 + $6,062,838/$6,974,094 = 0.95Receivables derangementReceivables overturn = network credit sales/Average sack Receivables= $50,823,685/ ($6,062,838 + $5,657,216/ 2) = 8.7 timesInventory turnoverInventory turnover = appeal of Goods Sold/Average Inventory= $42,037,624/$7,850,970 = 5.35Profitability ratios for 2005Asset turnoverAsset Turnover = final gross sales / Average Assets= $50,823,685 / [($34,592,182 + $33,856,256) / 2] = 1.5%Profit marginProfit Margin on Sales = Net Income / Net Sales = $1,956,371 / $50,823,685 = 3.

8% grant on assetsReturn on assets = Net Income / Average A ssets= $1,956,371 / [($34,592,182 + $33,856,! 256) / 2] = 5.7%Return on common stockholders? equityReturn on popular Stockholder?s justice= Net Income / Average crude Stockholder?s impartiality= $1,956,371 / [($22,115,255 + $21,696,000) / 2] = 8.9%Solvency ratiosDebt to total assets= Debt to total Assets = amount Debt / Total Assets= $12,476,927 / $34,592,182 = 36% times interest earnedTimes Interest earn = Income before Income Taxes and Interest expenditure / Interest Expense= $3,042,820 / $143,175 = 21.25 TimesHorizontal and vertical... If you penury to get a luxuriant essay, order it on our website: OrderEssay.net

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