1. Operating Asset Management Analysis A. Current Ratio Current Assets / Current

Question

1. Operating Asset Management Analysis A. Current Ratio Current Assets / Current Liabilities Heckle Co. 1,520,400 / 544,200 = 2.794 Jackle Co. 2,629,800 / 1,046,000 = 2.514 B. Quick Ratio (Current Assets – Inventories) / Current Liabilities Heckle Co. 890,600 / 544,200 = 1.637 Jackle Co. 1,376,400 / 1,046,000 = 1.316 C. Receivables Turnover Net Credit Sales / Average Accounts Receivable Heckle Co. 12,560,000 / 552,800 = 22.721 Jackle Co. 25,210,000 / 985,400 = 25.584 D. Day’s Sales Uncollected 365 / Receivable Turnover Heckle Co. 16 Day’s Jackle Co. 14 Day’s E. Inventory Turnover Cost of good’s sold / Average Inventory Heckle Co. 6,142,000 / 629,800 = 9.752 Jackle Co. 14,834,000 / 1,253,400 = 11.835 F. Day’s Inventory On Hand 365 / Inventory Turnover Heckle Co. 37 Day’s Jackle Co. 31 Day’s G. Payables Turnover Total Supplier Purchases / Accounts Payable Heckle Co. 6,142,000 / 344,000 = 17.855 Jackle Co. 14,834,000 / 572,600 = 25.906 H. Day’s Payable 365 / Inventory Turnover Heckle Co. 20 Day’s Jackle Co. 14 Day’s I. Financing Period Day’s Inventory Period + Day’s Receivable – Day’s Payable Heckle Co. 33 Day’s Jackle Co. 31 Day’s 2. Profitability And Total Asset Management Analysis A. Profit Margin Net Profit / Sales x 100 Heckle Co. 215,400 / 12,560,000 = 1.715% Jackle Co. 305,800 / 25,210,000 = 1.213% B. Asset Turnover Sales Or Revenue / Total Assets Heckle Co. 12,560,000 / 4,987,200 = 2.518 Jackle Co. 25,210,000 / 9,326,600 = 2.703 C. Return On Assets Net Income / Total Assets Heckle Co. 215,400 / 4,987,200 = 4.319% Jackle Co. 305,800 / 9,326,600 = 3.279% 3. Financial Risk Analysis A. Debt To Equity Ration Total Liabilities / Shareholder Equity Heckle Co. 2,544,200 / 2,443,000 = 1.041 Jackle Co. 6,280,600 / 6,280,600 = 1.000 B. Return On Equity Net Income / Shareholder Equity Heckle Co. 215,400 / 2,443,000 = 8.817% Jackle Co. 305,800 / 6,280,600 = 4.869% C. Investing Coverage Ratio Heckle Co. Jackle Co. 4. Liquidity Analysis A. Cash Flows To Sales Operating Cash Flow / Net Sales Heckle Co. 271,500 / 12,560,000 = 2.162% Jackle Co. 492,500 / 25,210,000 = 1.954% B. Cash Flows To Assets Cash From Operations / Total Assets Heckle Co. 271,500 / 4,987,200 = 5.444% Jackle Co. 492,500 / 9,326,600 = 5.281% C. Free Cash Flows Cash Flow From Operations – Capital Expenditure Heckle Co. (353,500) Jackle Co. (557,500) 5. An Analysis Of Market Strength A. Price / Earnings Ration Market Value Per Share / Earnings Per Share Heckle Co. 60 / 4.3080 = 13.928 Jackle Co. 76 / 10.1933 = 7.456 B. Dividend Yield Annual Dividend Per Share / Price Per Share Heckle Co. 1.0 / 60 = 1.667% Jackle Co. 3.8 / 76 = 5.000% What are their similarities differences strengths weakness In depth

Explanation / Answer

We Summarize as below A) Current Ratio Heckle Co. 2.794 Jackle Co. 2.514 Similarity & strength Standard of Current ratio is 2:1, where as in this case both have well achieved there current Ratio standard, meaning both are well equipped to meet their short term liabilities B) Quick Ratio Heckle Co. 1.637 Jackle Co. 1.316 Similarity & strength Standard of Quick ratio is 1:1, where as in this case both have well achieved there Quick Ratio standard, meaning both have sufficient amount of quick assets I.e assets which can be easily converted into money, to meet their curent liabilities claim c) Receivables Turnover                 Times Heckle Co. 22.721 Jackle Co. 25.584 Similarity & strength Both Have high Receivable Turnover, which states that both have an efficient collection circle . Receivables are collected on timely manner in both the companies d) Day Sales Collected Heckle Co. 16 Days Jackle Co. 14 Days Similarity & strength Associated with receivables turnover , both have prompt collection of their recievables Receivables are collected in a fortnight, which specifies high quality customer base and an efficient collection department.

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