Current asset

to the fact that current liabilities grew faster than current assets (256% versus 129%). It reflects that there was a decline in term of the company’s ability to service its short-term financial obligations. Generally, a higher current ratio is preferred, especially in the garment manufacturing industry, because it has to hold slow-moving inventories. For instance, River Island Clothing limited (RICL), a similar business to PLL in the same industry, reported 2.9 in terms of current ratio in the…

Goodwill is explained as the ‘future economic benefits arising from other assets acquired in a business combination or acquisition that are not individually identified and separately recognised’ in AASB 3 Appendix A. Physical asset including buildings or equipment cannot be considered as goodwill, it should be an intangible asset that has no physical substance. And a business combination itself means ‘a transaction or other event in which an acquirer obtains control of one or more business’. On…

liquidity, activity, profitability and coverage ratios. The company used current ratio, current cash debt coverage ratio, inventory turnover, asset turnover, profit margin on sale, return on assets, times interest earned ratio and cash debt coverage ratio. The current ratio is a liquidity ratio that assesses the company’s operating efficiency. The current ratio is computed by dividing the company’s current assets by current liabilities to assess whether it has enough resources to meet its…

2. Using the current LIBOR rate in order to project future free cash flows rather than the forward LIBOR yield curve. 3. Estimation of prepayments speed, impacting future cash flows and ultimately the valuation of Interest-Only strips. Question 5.1) Its use of the current LIBOR rate rather than forward yield curve to project the future cash flows on its IOs and to discount these cash flows. Choice 1: Using a discount rate…

bank can be classified as insolvent. The first is if the worth of the bank 's assets and less that the worth of the bank 's liabilities. The second is if the bank cannot pay its debts, even if the bank 's assets are worth more than their liabilities, this is then a problem with the bank 's liquidity. When analyzing the profitability or worth of a bank, book value is commonly used to understand the net worth of all the assets and liabilities that a bank holds on its balance sheet. However, there…

for lending and investment purposes as the owners would be sure of the assets to buy or finance in addition to the collateral available to secure financing. This paper seeks to forecast and analyze the financial statements…

among several others. Prudence The prudence convention states that caution should be exercised when making professional judgements in accounting estimates. Prudence requires the accountant to exercise caution in their estimates so that income and or asset prices are not overstated and also that expenses are not underestimated. There is a danger that management in an organisation…

four categories of ratio analysis that measure different aspects of a company’s operations: profitability, short-term liquidity, long-term solvency, and market valuation. For this assessment, I calculated five financial ratios: gross profit margin, current ratio and quick ratio, and debt ratio and debt to equity ratio (Heisinger & Hoyle, 2012). Profitability Ratios Profitability ratios are used to find the profitability trends of a company. This is vital information for analysts,…

Capital Structure 2.1. SWOT Analysis  Strengths   Cyclermate has a long establishment time and reputation in producing traditional bike. The company has asset of a large piece of land worth £ 208,000 (included £ 48,000 of factory and £ 160,000 of unused land).  Weaknesses   Cyclermate has very few current assets and more non-current asset. This reduces the liquidity of money. There is a great liability that is in the form of bank overdrafts. Costs are rising while price per unit…

RM 19,368,505 = 0.03 = 1.18 Return on Assets = Net Profit RM 46,496,000 RM 22,829,045 Average Total Assets RM 1,576,416,000 RM 215,967,671 = 0.03 = 0.11 Return on Equity = Net Profit RM 46,496,000 RM 22,829,045 Average Shareholder Equity RM 1,943,952,000 RM 215,323,601 = 0.02 = 0.11 Operating Expense Ratio = Operating Expenses RM 1,588,611,000 RM…