Financial Case Analysis - Ratio Analysis

The financial proportions used in this problem show that Bethesda mine has some work ahead of them. There is substantial sort of life for improvement for some of the dimensions involved. A more extreme synopsis would require ratio information from the mining manufacture as a whole but a downcast centering is provided below. The authentic ratio is low. Bethesda Minings current ratios over the twain old age given indicate negative exonerate working capital. short bullion to cover daily expenses is not an attractive site in any industry. One actor in particular proposition that is decreasing the current ratio is accounts payable. This item is rather senior tall and is affecting the companys short liquidity. On a bright note, the current ratio meliorate 22.3% year-to-year so focus appears to be in the correct place. Removing inscription levels from the equation yields the quick ratio, which is significantly slight than the current ratio for Bethesda Mining. This d ecrease indicates that part of the problem may be fasten into excessive inventory levels. This, coupled with the game accounts payable values, is detrimental the current ratio. The quick ratio draws economic aid to this as its value is less than half that of the current ratio. The property ratio is a very straightforward calculation. In Bethesda Minings case, it is clearly saying there is not enough exchange sexual congenator to current liabilities.

Taking the three ratios discussed so far into account, it could be theorized that Bethesda Mining is purchasing inventory at a high level than sales are occurri ng. The accounts payable accounts (though de! creasing in 2003) are still too high when compared to the available cash on hand. The debt-equity, equity multiplier, and total debt ratios all lead to interchangeable conclusions. Bethesda Mining is utilizing a nearly 50/50 debt-equity go on to fund assets. 2003 figures show that the firm is... If you want to model a full essay, order it on our website: BestEssayCheap.com

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