1.Calculate Dunhams 1995 financial rations. (See Exhibits 1,2, and 3).
Current Ratio = (current assets/current liabilities) = (16,268/7,600) = 2.1405%
Inventory Turnover = (gross revenue/inventory) = (26,671/6,133) = 4.3487%
receivable____ = 5,920___ = 81.01 Days
DSO = annual sales/365 26,671/365
Fixed addition Turnover = (sales/net fixed assets) = (26,671/3,336) = 7.9949%
Total Turnover Asset = (sales/total assets) = (26,671/16,268) = 1.6394%
Total Debt to Total Assets = (total debt/total assets) = (9,666/16,268) = 0.5941%
Time Interest Earned = (earnings sooner interest taxes/interest charge)
                        = (1,331/578)
                        = 2.3027%
EBITDA Coverage = (EBITDA + Lease Payment)/( Interest + mavin payment + Lease                                 Payment)
Profit margin on sales = (net income on hand(predicate) to common stock)/(sales)
                        = (376/         26,671)
                        = 0.01409%
Basic Earning Power = (EBIT/ Total Assets) = (753/16,268) = 0.0462%
Return on Total Assets = (Net income addressable to common stock/Total Assets)
                = (376/16,268)
                        = 0.02311%
Return on common beauteousness = (Net income available to common stockholders/Common Equity)
                        = (376/6,602)
                        = 0.
05695%
                       Â
2.Does a trend abbreviation indicate Dunhams localise has been deteriorating? Â Â Â Â Â Â Â Â (See Exhibit 3)
A trend analysis indicates that Dunhams position has been deteriorating.
3.Is the bank justifiably concerned? Justify your answer.
The bank is justifiably concerned because the debt ratio increases and creditors prefer low debt rates collectible to the reason that the greater cushion against creditor losses in the showcase of liquidation.
4.Nineteen ninety-four was a down year for Dunham. Do you appreciate that CBG had a responsibility to express concern in 1994, peculiarly since the current ratio was close to 1.85, the number that could trigger a call of the loan? Explain.
GCB had the responsibility to express concern in 1994,
If you want to get a full essay, order it on our website: Ordercustompaper.comIf you want to get a full essay, wisit our page: write my paper
No comments:
Post a Comment