Lancaster Colony Case Analysis

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Lancaster Colony Cooperation manufactures diversified food products for the retail and food industry customers as Albertson 's, Ford Motor Company in the United States. The company consists of three largely autonomous divisions: Specialty Foods, Glassware & Candles, and Automotive Accessories.
Financial Ratio Analysis: Lancaster Colony’s current ratio (4.60) means for every dollar of current liabilities, Lancaster has $4.60 of current assets. It demonstrates that Lancaster has the ability to pay out all current liabilities and still have enough assets left over to cooperate with. Acid-test (quick) ratio measures immediate liquidity. At 3.28, it shows that the company has a good ability to meet its immediate liabilities. Lancaster’s 2015 accounts …show more content…

If we divide the accounts receivable turnover (18.67) into 365 days, we can know that the accounts receivable are collected period of approximately every 20 days. The company’s inventory turnover is high, ranging from 11.14 to 11.11 from 2014 to 2015. This means that the inventory is sold at an efficient rate. The company does not have to tie up cash in inventory and be able to avoid inventory obsolescence. Overall, we can see that the company has a great ability to pay the short-term debt. The second ratio is profitability ratio, which can indicate the operating success of a company. The company experiences an increase (7.2% to 9.2%) in its profit margin from 2014 to 2015. It indicates that the company earns profitable income in response to each dollar of …show more content…

What’s more, the company has extremely great ability to meet its interest’s payments. Moreover, based on the recent news, the company just acquired all of the assets of Angelic Bakehouse, which will definitely strengthen their economic power. Therefore, we can say that Lancaster Colony Cooperation is strong financially, efficient, profitable, and

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