Triple Delight

trinity A Office Mart is a scotch corpo symmetryn, organized in 1978, which sold a complete infection channel of office equipment, furniture, and supplies. Budgetary control of the two authentic stores was centralized in the store and office complex which operated in the big of the two cities. With the arrival of the personal computer, a major(ip) persona of family sales, three-base hit A has experienced excellent ripening in revenue and earnings. The income statement attached provides an illust ration of a portion of the family’s sales and earnings history. The hover sheet attached also details the association’s total assets and liabilities for selected old age. However, in early 1996, there had been ca engross for use up on the part of federation management. Prices from suppliers had risen and the firm’s financial managers wondered about the effect of this upon profitability and the universal procedure of the business. I have ex amined the financial condition of Triple A through various ratios to aid in ascertain if Triple A can remain a go along guest of our bank. To start, I examined the short-term solvency, or liquidity, of the company. The true ratio has sensibly decreased over the past several years masking the firm is becoming less liquid.

This reflects the number of clippings the company’s present-day(prenominal) liabilities are covered by its current assets. Next, the acid-test, or quick ratio, has shown a decrease as well. This illustrates that the company is more probable to have liquidity problems. Subsequ ently, the next ratio’s my company eva! luated were the efficiency ratios. The accounts receivable turnover was really high which shows that the firm is using its accounts receivable effectively in generating sales. Also, the comely collection period shows the average length of sequence for which the business extends credit to its customers. Since the accounts receivable turnover was so high, that allowed for the average collection period to be lower, meaning...

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