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1.Current ratio 2.Quick ratio 3.NWC to TA
2008 2.44917 0.958512 0.268515
2007 3.513386 2.760191 0.386917
2006 4.426622 3.560803 0.432908
Trend lower liquidity since 2006 lower liquidity since 2006 lower liquidity since 2006 Increased efficiency from 2006 to 2007 Decreased efficiency since 2007 Decreased efficiency since 2006 Decreased efficiency from 2006 to 2007 Increased efficiency since 2007 Decreased efficiency from 2006 to 2007 Increased efficiency since 2007 Increase in leverage since 2006 Sharp drop in coverage during 2008 Increase in profitability from 2006 to 2007 Lower profitability since 2007 Lower ROA since 2007 Lower ROE since 2007
4.Accounts receivable turnover 16.5408 6.Inventory turnover ratio 7.Fixed Assets turnover ratio 2.8018 8.Total Assets turnover ratio 1.320058 0.958103 0.431777 4.987584 1.298997 0.399984 2.91782 2.320071 3.313126 4.47492 19.76149 7.278205 8.955173 10.34965
Long term solvency
9.Debt ratio 10.Times interest Earned ratio 0.44659 -0.58196
11.Net profit margin -0.05477 12.Return on assets (ROA) 13.Return on equity (ROE) -0.0723 -0.13065 0.083621 0.080118 0.140997 0.061897 0.080404 0.134004
SAFOCO Short term solvency
lower liquidity from 2006 to 2007 higher liquidity since 2007 lower liquidity from 2006 to 2007 higher liquidity since 2007 higher liquidity since 2006 Decreased efficiency from 2006 to 2007 Increased efficiency since 2007 Decreased efficiency from 2006 to 2007 Increased efficiency since 2007 Increased efficiency since 2006 Decreased efficiency from 2006 to 2007 Increased efficiency since 2007
2.267226 2.Quick ratio 3.NWC to TA 1.803057 0.400996
1.974102 1.133188 0.395454
2.134013 1.285426 0.365113
4.Accounts receivable turnover 16.89574 6.Inventory turnover ratio Cost of goods sold/Inventory 7.Fixed Assets turnover ratio 8.Total Assets turnover ratio 42.14007 23.53412 6.649969 12.3066 22.50169 4.468352 16.40179 15.26911 4.777764 15.23571 16.08805
Long term solvency
However.SAF is slower than average collecting sales. inventories of SAF are being sold faster than industry. However.99509 181.Times interest Earned ratio 32.8667 0.Debt ratio 0.266619 Liquidity ratio Looking at the current ratio it appears that BHS and SAF are more liquid than the industry. when looking at Quick ratio.9.327076 Increase in leverage from 2006 to 2007 Decrease in leverage since 2007 Increase in coverage from 2006 to 2007 Lower coverage since 2007 Lower profitability since 2006 Decrease in ROA from 2006 to 2007 Higher ROA since 2007 Higher ROE since 2006 Profitability Ratios 11.180862 0. again indicating too high inventories. * Time-interest earned: BHS < industry < SAF This indicates that BHS wasn’t profitable [ EBIT = -15920] and also was not effective in searching cheap funds ( interest expense was too high = 27356 ) SAF was good at covering its interest obligations.a better measure – + BHS is not as liquid indicating that inventory levels are probably too high. SAF is very efficient at converting sales volume into bottom line profit.033227 0.246906 73. May be the policies of SAF is keeping slow collection period in order to sell faster * TAT and fixed assets turnover: BHS < industry < SAF →SAF is very efficient at converting fixed asset and total assets to sales →BHS is inefficient at converting fixed asset and total assets to sales Long-term solvency * Debt-ratio: SAF < INDUSTRY < BHS SAF has lower proportion and BHS has higher proportion of their assets which are financed with debt than the industry.321645 10.027197 0. .Return on equity (ROE) 0.410594 0.Net profit margin 12. Inventories are also being sold more slowly than industry and SAF. Efficiency ratio . .145528 0.90323 0.23592 0. Profitability ratio * Profit margin: BHS < industry < SAF BHS has extremely high expense ratio relative to sales. + the quick ratio of SAF is the highest one in comparison with BHS and industry => SAF is really safe because it still has the ability to repay current liabilities after the least liquid of the current assets is subtracted.BHS is slower than industry and SAF in collecting sales.158752 0.Return on assets (ROA) 13.032569 0.
The market book ratio of SAF is more than 1 SAF is successful in creating value for its stockholders. => BHS at that period controlled the expenses generated in order to makes sales well. * P/E: P/E of BHS is negative because EPS value is below zero. Market values ratio * M/B: Market to book ratio of BHS is less than 1. and the company was already appropriately leveraged. SAF was under-leveraged as well (reduction in EM) showed that the company has been managing itself better.a reduction in PM . that means.increase in EM and TAT Creditors perceived the company as riskier and charge it higher interest. The reason may be the company’s performance was so strong that there was little room for improvement. it is clear that ROE of SAF has increased by the time [06-08] which based on 2006-2007: . P/E of SAF is lower than industry means that investors are less willing to pay for the share of SAF.A reduction in TAT: BHS was profitable (increased in PM) but not too efficient. But the increase in EM may probably lead BHS to pay higher interest that resulted in higher financial risk. Moreover. 2007-2008: .* BHS has lower the ROA and ROE than those of SAF and industry.reduction in EM and PM . the company was poorly managed and had higher costs that decrease its operating profit margin SAFOCO As an overall trend. ROE increased slightly due to: . BIEN HOA SUGAR 2006-2007: As can be seen clearly from the table. means that the firm has not been successful in creating value for its stockholders. it is efficient at using assets & managing its operation. So. So BHS is inefficient as using its assets and managing its operation. 2007-2008: From the table it is clear that BHS had a dramatic reduction in ROE because of: . . mainly due to productivity problem SAF has higher ROA & ROE than those of industry.a rise of PM and EM. this was simply making things more risky. .reduction in PM and TAT .increase in EM The equity multiplier was the source of the rise. this was a very positive sign for the company.increase in TAT Company’s ROE went up due to an increase in the asset turnover. the company is losing money.