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What is Accounting Ratios Assignment Help?
Accounting Ratios assignment help or Accounting Ratios homework Help refers to the service where we help students in the preparation of their assignment using various accounting ratios. One can understand our approach by seeing the Working Capital analysis using accounting ratios for Loblaw Company (LLC) and Metro Inc. (MI) companies. This will provide student accounting Ratios assignment help or Accounting Ratios Analysis homework Help for their projects.
Approach using Examples for Accounting Ratios Homework Help
Working Capital Analysis for Accounting Ratios Homework Help
The working capital management is the biggest challenge for any company. Working Capital is the difference between the Current Assets and Current Liabilities of the Firm, enterprise or any other concern. It is very important for the business because it determines and liquidity of the firm and also represents the goodwill and credibility of the firm. Working Capital for any company is more important because they need strong working capital to run the business. Working Capital can be of two types.
If Current Assets is more than Current Liabilities, it indicates that the Company is having Strong working Capital and they have the ability to meet its day to day operations activities of the business. But if Current Asset is less than Current Liability it indicates a weak working Capital and company is not able to meet the operating activities of business. In this acquisition spree too working Capital plays a very important role because Target Company should have strong working capital so that they can meet the sudden demand in the market. They need to have very strong working capital because it will not only help them to have good regular business operation but also strong reputation in the Market through which they might get other Clients in the business.
Let’s understand the importance of working capital with the help of cash; It is the most liquid form of working Capital. A company having good cash in hand is able to have great opportunities. The company requires cash balance as it will protect them from uncertain situations. But on the other hand it should not be kept idle as it will erode its value through time value concepts. Hence, management of cash is also extremely important for performance of a company. Similarly, right balance of trade balance is also important. Trade receivables are one of the most important source of working capital management .Often most of the companies in manufacturing field suffer one permanent problem i.e. bad debts. This can be analyzed with the help of efficiency ratios. Hence, it plays an important criterion in selecting the target company out of LLC and MI.
Analysis of Working Capital Management for for Accounting Ratios Assignment Help
This section will do detail working capital management analysis of the LLC & MI using efficiency ratios to check the efficiency achieved by them from 2012 to 2013 regarding the acquisition decision.
| Asset Efficien MI Analysis:- LLC | ||
| Year | 2012 | 2013 |
| Asset turnover Ratio | 1.378216 | 1.362636 |
| Days Inventory | 405.531 | 371.3761 |
| Days Debtors | 2.992442 | 2.897043 |
| Times Inventory Turnover | 4.833254 | 5.157414 |
| Times Debtors Turnover | 121.974 | 125.9905 |
| Asset Efficiencies Analysis:- MI | ||
| Year | 2012 | 2013 |
| Asset turnover Ratio | 1.628307 | 1.521366 |
| Days Inventory | 317.4863 | 362.8987 |
| Days Debtors | 4.000267 | 3.555483 |
| Times Inventory Turnover | 3.600393 | 3.045745 |
| Times Debtors Turnover | 91.24391 | 102.6583 |
LLC
A good outlook is presented by the efficiency ratios because of the increase in the stock turnover and decrease in the turnover days. On the other side an decreasing trend is seen in the debtor’s age which also presents the great scenario and improve in assets efficiencies for the company compare to last year.
MI
A bad outlook is presented by the efficiency ratios because of the decrease in the stock turnover and increase in the turnover days. On the other side a decreasing trend is seen in the debtor’s age which also presents the goods scenario but the greater increase in the stock inventory days nullify the efficiency achieves in collections.
Plant, Property & Equipment Analysis for Accounting Ratios Homework Help
The performance of the assets for both companies and return on invested capital will be done through two important ratios as given below:-
| Assets Analysis:- LLC | ||
| Year | 2012 | 2013 |
| Return on Equity | 18.67% | 16.38% |
| Return on Assets | 13.24% | 12.06% |
| Assets Analysis:- MI | ||
| Year | 2012 | 2013 |
| Return on Equity | 21.99% | 12.95% |
| Return on Assets | 20.54% | 12.62% |
ROE Analysis for Accounting Ratios Assignment Help
LLC
It stands for return on equity which means the amount of return get by the common shareholders. From the ratio analysis we found that it is on decreasing trend due to decrease in profit as shown above. It decreases from 18.37% in 2012 to 16.38% in 2013 which means the equity investors will get just return of 16.38% in 2013.
MI
From the ratio analysis we found that it is on decreasing trend due to decrease in profit as shown above. MI will have to take action to control the falling ROE and its fall is much higher compare to LLC as just 12.95% is returned to equity holders in 2013 compare to 21.995 in 2012. It also shows that LLC is more effective in giving return to its shareholders compare to MI.
ROA Analysis for Accounting Ratios Homework Help
LLC
It stands for return on Assets which means the amount of return on total Assets. It indicates that the company is more efficient in using assets to generate profit; a lower ROA indicates that the company is less efficient in using assets to generate profit. From the ratio analysis we found that it is on decreasing trend due to increase in profit margin which in not good from investors’ point of view. It decreases from 13.24% in 2012 to 12.06% which means that company will just get return of 12% on its total assets
MI
From the ratio analysis we found that it is on decreasing trend due to increase in profit margin which in not good from investors’ point of view. . It decreases from 20.54% in 2012 to 12.62% which means that company will just get return of 12.62% on its total assets and the drop is much higher compare to LLC.
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