Triple Delight

trinity A Office Mart is a stinting corpo symmetryn, organized in 1978, which sold a complete transmittal channel of office equipment, furniture, and supplies. Budgetary control of the two authoritative stores was centralized in the store and office complex which operated in the big of the two cities. With the arrival of the personal computer, a major(ip) persona of family sales, manifold A has experienced excellent increase in revenue and earnings. The income statement attached provides an illust proportionalityn of a portion of the unwavering’s sales and earnings history. The aplomb sheet attached also details the phoner’s total assets and liabilities for selected years. However, in early 1996, there had been ca theatrical role for use up on the part of guild management. Prices from suppliers had risen and the firm’s financial managers wondered about the effect of this upon profitability and the common procedure of the business. I have examined the financial condition of Triple A through various ratios to aid in find if Triple A can remain a act guest of our bank. To start, I examined the short-term solvency, or liquidity, of the company. The true ratio has sensibly decreased over the past several years masking the firm is becoming less liquid.

This reflects the number of clippings the company’s catamenia liabilities are covered by its current assets. Next, the acid-test, or quick ratio, has shown a decrease as well. This illustrates that the company is more probable to have liquidity problems. Subsequently, the next ratio’s my company evaluated were the! efficiency ratios. The accounts receivable turnover was unfeignedly high which shows that the firm is using its accounts receivable effectively in generating sales. Also, the average out collection period shows the average length of clock time for which the business extends credit to its customers. Since the accounts receivable turnover was so high, that allowed for the average collection period to be lower, meaning...

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