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Financial Paper

  • Submitted by: ngates123
  • on December 4, 2011
  • Category: Miscellaneous
  • Length: 761 words

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Below is a free excerpt of "Financial Paper" from Anti Essays, your source for free research papers, essays, and term paper examples.

The following summary includes a full calculation of ratios between Reed’s Clothier, Inc and the Industry and compares’ Reeds Company’s results with the industry’s averages, answers the question why does Holmes want Jim Reed to have an inventory reduction sale, and what does he think will be accomplished by it, if he strengthens his working capital policy to the averages, would this affect his sales and what type of inventory control system would be the most beneficial for Jim Reed’s Company to use. Also included is what type of accounts receivable control would be most beneficial to Jim Reed, is the increase in sales related to the increase in inventory, and what is Jim Reeds cost of not taking the supplier discounts.
        Reed                       Industry

  1. Liquidity Ratios                                           2.02 2.7
      Current Ratio

          Quick Ratio                                 0.94 1.6

        Receivables                                                   4.93 7.7
      Turnover

          Average Collection                                       74.08 47.4
                Period

          Efficiency Ratios___                                       1.28 1.9
          Total Asset Turnover

          Inventory Turnover                                         2.91 7

          Payable Turnover                                             6.97 15.1

          Profitability Ratios                                           .30 Or 30% 33
          Gross Profit Margin

          Net Profit Margin                                               .042 7.8

          Return on Common                                           0.16 Or 16% 25.9
            Equity

The ratios reveal Reed’s Clothier Company invested too heavily in inventory and is not making enough profit.   Looking at the ratios, Reed’s Company is inadequate on all the issues. Reed’s current and quick ratio is less than...

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"Financial Paper". Anti Essays. 9 Dec. 2018

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Financial Paper. Anti Essays. Retrieved December 9, 2018, from the World Wide Web: http://cassandralynndesignllc.com/free-essays/Financial-Paper-139134.html