Saturday, February 23, 2019
Balance Sheet and Income Statement Commentary Essay
On JB Hunts difference sheet for 2011 lists authoritative assets of $513,542,000 and actual liabilities of $438,515,000, yielding a topical symmetry of 1.17, which indicates the confede proportionalityn, has $1.17 of modern assets for both $1 of current liabilities. The old stratum 2010, the current dimension was 0.91. This shows a 29% augment in the current symmetry everyplace the forward form. An organization with a current proportionality of 2 or higher is usually viewed by lenders to be a steady-going put on the line for short-term creed. Based on the 29% increase in current balance, JB Hunt is in a better position to obtain short-term financial than it was in 2010. However, it is becalm below the benchmark of 2 that lenders feel to be a soundty insecurity. Under the economic plenty of the past five categorys, lenders may run into into conside symmetryn opposite factors much(prenominal) as comparing JB Hunts current proportion to that of other co mpeting trucking companies. JB Hunts libertine dimension for 2011 is 0.95 and for 2010 was 0.70. A nimble proportionality or acid-test measures notes, securities, and accounts receivables of a party in comparison to its current liabilities. The quick dimension is especially main(prenominal) to companies that have a history of challenges with converting inventory into cash promptly. This difficulty could intercept with the telephoners ability to pay its short-term debt.A quick proportionality between 0.50 and 1.0 is typically perceived as satisfactory, save with a shadow of potential cash-flow problems. JB Hunts quick proportion amend by 36% oer the preceding year, which indicates the association, has improved its ability to sustain its short-term obligations. JB Hunts debt to stockholders virtue balance for 2011 is 299% and 242% for 2010. This proportion evaluates the completion to which the social club relies on borrowed cash for its ope limits. A ratio over coke% indicates a business has withal much debt and not enough rectitude to pay off the debt if they abruptly needed to do that. With a debt to equity ratio of 299%, JB Hunt has a importantly high level of debt when comp bed to its equity. Investors and lenders would about likely view the community to be too unsteady to either invest in or to lend money to.JB Hunts grassroots moolah per share ratio for 2011 is 1.07 and 0.79 for 2010. This ratio indicates the amount of arrive at the business pull in for each share of outstanding common stock. The boodle per share ratio reveal network that potentially stimulate the offset of a smart set and provide funds, which can be distributed as a dividend to stockholders. JB Hunts basic earnings per share increased by 35% over the previous year, which indicates the association has money to reinvest to ignite elevate give riseth. JB Hunts way out on sales ratio for 2011 is 94% and 92% for 2010. This ratio indicates if the pa rty is keeping grounds with or exceed its competitors in producing income from sales and services.JB Hunt increased its sales ratio by 2% over last year. A 94% sales ratio is an extremely high number compared with the other three companies analyzed for this assignment. To ascertain how competitive this ratio is with the ratios of other trucking companies would require additional assay and analysis of more companies, which is outside the scope of this assignment. JB Hunts strike on equity ratio for 2011 is 45% and 35% for 2010. This ratio assesses risk by indicating how much a beau monde earned for each one dollar bill invested by shareholders. JB Hunts equity ratio of 45% is a breadable ratio especially since investors consider a ratio over 15% to be a reasonable return. In addition this ratio is an increase of 29% over the previous year.UFP Technologies (Plastics manufacturing)The 2011 balance sheet for UFP Technologies lists current assets of $58,040,394,000 and current liabilities of $9,465,304,000, yielding a current ratio of 6.13, which indicates the company, has $6.13 of current assets for every $1 of current liabilities. The previous year 2010, the current ratio was 47.62. This shows a significant increase in the current ratio over the previous year, which is due to assets acquired in 2010 due to an acquisition. An organization with a current ratio of 2 or higher is usually viewed by lenders to be a unhazardous risk for short-term credit. Based on a current ratio that is more than 3 times what is considered to be a safe risk, UFP Technologies seems like it will have no trouble obtaining short-term credit should the need arise. UFP Technologies quick ratio for 2011 is 4.80 and for 2010 was 36.12. This company has an outstanding quick ratio that is 4 times what is typically perceived as satisfactory.Based on this ration UFP Technologies should have no problem with cash flow or with paying its short-term debt. UFP Technologies debt to stockholde rs equity ratio for 2011 is 29% and 38% for 2010. This ratio indicates that the company has a low percentage of debt compared to its equity and does not affirm on borrowed money to run its operations. Investors and lenders would most likely view the company to be a safe investment or a safe company to lend money to on a short-term basis. UFP Technologies basic earnings per share ratio for 2011 is 0.77 and 0.72 for 2010. The companys basic earnings per share increased by 7% over the previous year, which indicates the company has some money to reinvest for further growth. UFP Technologies return on sales ratio for 2011 and 2010 is 12%.There was no change in this ratio from the previous year. This ratio indicates the company may not be keeping pace with its competitors in producing income from sales and services. UFP Technologies return on equity ratio for 2011 is 17% and 18% for 2010. This ratio assesses risk by indicating how much a company earned for each dollar invested by shareho lders. UFP Technologies equity ratio of 17% is a profitable ratio especially since investors consider a ratio over 15% to be a reasonable return. However, the ratio change magnitude by 5.5% over last which may be upsetting to shareholders who are looking for an increase in this ratio year after year and not a decrease. united inbred regimens, Inc. (Specialty food stores) fall in subjective Foods balance sheet for 2011 lists current assets of $8,444,492,000 and current liabilities of $463,421,000, yielding a current ratio of 18.22, which indicates the company, has $18.22 of current assets for every $1 of current liabilities. The previous year 2010, the current ratio was 1.37. This shows a 1,229% increase in the current ratio over the previous year. An organization with a current ratio of 2 or higher is usually viewed by lenders to be a safe risk for short-term credit. With a current ratio of 18.22 United vivid Foods would definitely be view favorably by lenders if the need arose to seek short-term credit. United Natural Foods quick ratio for 2011 is 0.59 and for 2010 was 0.44. The quick ratio is especially important to companies that have a history of challenges with converting inventory into cash quickly. A quick ratio between 0.50 and 1.0 is typically perceived as satisfactory, but with a shadow of potential cash-flow problems. Although a quick ration of 0.59 is an improvement over last year, this number is still low and indicates United Natural Foods may experience financial difficulty, which could interfere with the companys ability to pay its short-term debt.United Natural Foods debt to stockholders equity ratio for 2011 is 61% and 98% for 2010. This ratio evaluates the conclusion to which the company relies on borrowed money for its operations. A ratio over blow% indicates a business has too much debt and not enough equity to pay off the debt if they suddenly needed to do that. With a debt to equity ratio of 61%, which is a decrease of 37% over the previous year, United Natural Foods has significantly decreased its dependency on borrowed money to fund its operations. This makes the company more appealing to either investors or lenders since the reduction in this ratio indicates the company is less of a risk than it was a year ago. United Natural Foods basic earnings per share ratio for 2011 is 0.80 and 0.79 for 2010. This ratio indicates the amount of profit the business earned for each share of outstanding common stock. The companys basic earnings per share increased by 1.2% over the previous year, which indicates the company is moving in the right direction toward increase the earnings per share so that it can reinvest in the company and grow the company in the future.This percentage is actually a good forefinger of grow considering the state of the economy over the past 5 years. United Natural Foods return on sales ratio for 2011 and 2010 is 3%. This ratio indicates the company is maintaining the status quo and produced t he same amount of income from sales and services this year that it did last year. This could be due to the volatile economic conditions preventing new customers from obtain at United Natural Foods because they need to find way to hop-skip costs. United Natural Foods return on equity ratio for 2011 is 9% and 11% for 2010. This ratio assesses risk by indicating how much a company earned for each dollar invested by shareholders. United Natural Foods equity ratio for 2011 decreased by of 2%, which is a disappointing number for shareholders. Investors consider a ratio over 15% to be a reasonable return.well Fargo (Mortgage Company)Wells Fargos balance sheet for 2011 lists current assets of $1,313,867 million dollars and current liabilities of $920,070 million dollars, yielding a current ratio of 1.43, which indicates the company, has $1.43 of current assets for every $1 of current liabilities. The previous year 2010, the current ratio was 1.48. This shows a 3.4% decrease in the current ratio over the previous year. An organization with a current ratio of 2 or higher is usually viewed by lenders to be a safe risk for short-term credit. Based on the current ratio, Wells Fargo is a risky company for any lender. Under the economic circumstances of the past five years, lenders may take into consideration other factors such as comparing Wells Fargos current ratio to that of other competing companies. Wells Fargos quick ratio for 2011 is 0.07 was 0.11. A quick ratio or acid-test measures cash, securities, and accounts receivables of a company in comparison to its current liabilities. A quick ratio between 0.50 and 1.0 is typically perceived as satisfactory, but with a shadow of potential cash-flow problems. Wells Fargos quick ratio is 0.43 points below the minimum level of satisfactory.This company is severely at risk of not being able to convert inventory into cash quickly and may end up defaulting on its short-term debt. This is a risky company for investors and lende rs. Wells Fargos debt to stockholders equity ratio for 2011 is 827% and 884% for 2010. This ratio evaluates the extent to which the company relies on borrowed money for its operations. A ratio over 100% indicates a business has too much debt and not enough equity to pay off the debt if they suddenly needed to do that. With a debt to equity ratio of 827%, Wells Fargo has an astronomical level of debt when compared to its equity. Investors and lenders obviously view this company as a business to avoid. Wells Fargos basic earnings per share ratio for 2011 is 1.50 and 1.18 for 2010. This ratio indicates the amount of profit the business earned for each share of outstanding common stock.The earnings per share ratio reveal earnings that could potentially stimulate the growth of a company and provide funds, which can be distributed as a dividend to stockholders. Wells Fargos basic earnings per share increased by 27% over the previous year, which indicates the company may have some money to reinvest cover version into the company for growth. Wells Fargos return on sales ratio for 2011 is 48% and 36% for 2010. This ratio indicates if the company is keeping pace with or exceeding its competitors in producing income from sales and services.Wells Fargo increased its sales ratio by 12% over last year. A 48% return on sales ratio is a high number. This ration indicates that the company is making strides to be competitive again. Wells Fargos return on equity ratio for 2011 is 11% and 10% for 2010. This ratio assesses risk by indicating how much a company earned for each dollar invested by shareholders. Investors consider a ratio over 15% to be a reasonable return. A ratio of 11% is disappointing to investors. However, it is a urbane improvement over the previous year. So the company may be working on pulling itself back up and learning how to stupefy profitable and attractive to lenders and investors once again.ReferencesRaibom, C.A. (2010). Core Concepts of Accounting (2 nd ed.). John Wiley & Sons Inc.. annual Reports, http//www.sec.gov, date retrieved 06/28/2012
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