Huffman Trucking Current Financial Position

Liquidity dimension This take represents the popular financial proportion utilise to test a companys fluidity by deriving the portion of reliables assets available to cover incumbent liabilities. This canon consists of dividing the received assets by the live liabilities. In the skid of Huffman Trucking, the current assets represent $ 111, 728; current liabilities represent $ 88, 827. When applying the formula, the current symmetry comes break through to 1.3. This formula is called the current ratio. This number measures the succinct enclosure power to pay maturing obligations (Weygandt, Kimmel, & Kieso, 2010) and to meet unexpected ask for cash. This ratio is a more dependable than a working(a) capital ratio. after review of this ratio, it seems as though there seems to be a lack of current assets to signify a healthy ratio in our opinion. We recommend reducing current liabilities in coiffe to obtain a healthier ratio. This could be done by perh aps investing in a long term liability influx of cash to win the current assets or reducing the current liabilities. Profitability Ratio For this area, we opted to use the return on assets ratio. Return on assets is a measure of how effectively the self-coloreds assets are beingness used to generate lolly (Weygandt, Kimmel, & Kieso, 2010).

Return on assets is figure by dividing net income by medium assets. After doing the calculations, we took $ 19,211 by $ 220,003 (average for the past two years). We obtained an average of 8.7%. We feel this is higher than the manufacture average but not as good as it could be. Landstar Systems has an aver! age of 15.36 (YCharts, July 2010). This is high, but we would recommend striving for a pronged digit average on this ratio. Solvency Ratio For the solvency ratio, we opted to look at that debt to total assets ratio. This formula is calculated by dividing total debt (both current and long-term liabilities) by total assets. This number will leaping indicate the companys pointedness of leverage. Currently,...If you want to eviscerate a full essay, order it on our website: OrderCustomPaper.com

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