1300SMILE Ltd owns and operates full services dental facilities in Queensland and also in Adelaide, South Australia. The company delivers services to patients by using dental surgeries and practice management. 1300SMILE also provides services for self-employed dentists who want to have experiences on their own dental practices. The company has different comprehensive services such as marketing, billing and collection and licensing to all participants’ dentists. The services provided by 1300SMILE Ltd only focus on the delivery of dental services rather than on the administrative aspects. The purposes of the company are to gain profits by persuading more dentists to existing facilities and to add new management facilities. It is true that the …show more content…
For 1300SMILES, shareholders can see how much the company make money through the profit margin and the return on equity(ROE). The profit margin and ROE declined over the past four years (1300SMILES, n.d.), and this effect is negative for company. Decreasing of the profit margin and ROE also is related to asset efficiency. Asset efficiency tests on efficiency of management in the used of assets to increase sales revenue, and it includes asset turnover. The asset turnover ratio decreased over the past four years as well (1300SMILES, n.d.). Since the company’s profit margin, ROE, and asset turnover fell down, the sales revenue per one dollar assets would go down. It would also hard for 1300SMILES to maintain a high degree of liquidity, because the company earns less …show more content…
It seemed that the company would fail soon because the ratios of profitability, asset efficiency, and liquidity decreased. However, that may not be true. Since the ratios of the debt to assets and the debt to equity went down over the past four years, the company became less dependent on leverage (Chron, n.d.). The company, therefore, is stable with a lower proportion of debt and has a stronger equity position. Thus, the company will still have chance to make their situation better if they heed few
However, financial situation of the firm plays a very important role in the decision of the bondholder and this company has been one of the most profitable companies America in terms of ROE, ROA ad gross profit margin. Apart from decrease in earnings and cash flow in 1997, UST had continuous increases in sales (10-year compound annual growth rate of 9%), earnings (11%) and cash flow (12%). They are generating their cash flows out of the operations. Thanks to their premium pricing, they are achieving more than average gross profit margin. So, over the years UST's revenues are stable and positive, and generally its statements are positive. The company does not have any problems with its cash flow.
Looking at the individual ratios seen in exhibit 1 and comparing it to the industry average shown in exhibit 2 gives a sense of where this company stands. Current ratio and quick ratio are really low and have been decreasing. For 1995, the current ratio is 1.15:1, which is less than the industry average of 1.60:1, however to give a better sense of where this stands in the industry, as seen in exhibit 3, it is actually less than the average of the bottom 25% of the industry. The quick ratio is 0.61 is less than the industry is 0.90. Both these ratios serve to point out the lack of cash in this company. The cash flow has been decreasing because, it takes longer to get the money from customers, but the company still needs to pay for its purchases. Also, the company couldn’t go over the $400,000 loan limit, so they were forced to stretch their cash.
Notably, its share price has dropped 43% just in the last year, after the publication of the year losses of €6.8 billion (remarkably €2.8 billion more than the losses of 2008) . The ROE for the bank passed from 7.89% in 2010 to minus -9.02% at the end of 2015. Based on the figures in the latest interim report in July 2016 the ratio decreased further to -11.52% in June . Considering this trend, we need to take into account also that in recent years, the ROE was consistently below the cost of capital, eroding value. A company can increase its ROE in 2 ways: increasing the numerator - raising your net income - or decreasing the denominator – the equity capital. Banks represent generally a capital-intense business, and the introduction of tighter regulations is posing difficulties to the banks that aim to reduce their equity capital. It appears clear that the only way to achieve a better ROE is to attain a high financial leverage . The pre-financial crisis leverage level was impressive (71.73%), and today is 27.11%, above the standard of its direct competitors .The return on assets has also decreased in the last six years and has reached a negative level of -0.46%
The report finds the prospects of the company in its current position are positive. The major areas of weakness require further investigation and remedial action by management.
The Dupont analysis includes the asset turnover ratio, the profit margin percantage, return on shareholder’s equity percentage, return on assets, and the equity multiplier (Spiceland, Sepe, and Nelson 258-264). The asset turnover ratio is the amount of revenue received for every one dollar of assets, it reveals how efficiently the company is distributing assets. Apple’s asset turnover ratio is 60.43 which means for every one dollar Apple has in assets, they receive approximately sixty cents (Apple Inc). Microsoft’s asset turnover ratio is 13.17 so for every dollar they only receive about thirteen cents (Microsoft Inc). Apple is doing significantly better in this category. The profit margin is just how much of a company’s sales they keep as a profit. Apple’s profit margin is 21.67% while Microsoft has a 28% profit margin so Microsoft is accumulating more profit off each sale but their sales are lower. The return on shar...
Overall, Horizontal analysis and financial ratios are essential factors that businesses use to monitor its liquidity. Therefore, in order to improve Apple’s ratios and profitability, the company needs to implement a strategy to increase the company’s liquidity. Business owners or managers should monitor current ratio and acid test ratio as these ratios help us to ensure the company has the proper liquid assets to pay current liabilities, to stay in operations and to expand the company. As we noted in our acid test ratio and current ratio for the company, we show a lower ratio for acid test ratio than the current ratio, which means that the company’s current assets rely on inventory. Therefore, the company needs to convert old inventory into
Six ratios - return on assets, profit-margin ratio, accounts receivable turnover, and inventory turnover, price-earnings ratio (P/E ratio), and the debt-to-equity ratio - reveals Boeing’s performance ability and offers insight into the company’s future outlook. Boeing’s return on assets - as related to its historical performance and that of its competitors - is a key factor in the determination the company’s performance. For example, Boeing’s return on assets of 4.0% - or $0.04 of profit for every dollar of assets - are slightly below the industry standard of 4.4% and significantly below some it 's peers - who hold return on assets of 5.7%, United Technologies, and 7.7% , Lockheed Martin. The wide difference between Boeing and its peers’ return on assets demonstrates that the company is not performing at it 's optimal condition. A concern for Boeing’s performance can also be proven by its historical return on assets statistics. Boeing’s return on assets has declined since 2014 - falling from 4.8% to its lowest percentage in four year - 4.0% (S&P Capital IQ, 2016). Based upon these finding, Boeing is not effectively utilizing its assets to make a profit (S&P Capital IQ, 2016; Hicks & Hicks, 2014). “The profit-margin ratio examines the amount of profit one is able to earn for each dollar of sales revenue” (Hicks & Hicks, 2014, p. 45). Boeing’s profit-margin ratio is 13.6% - meaning
...rs, setting a good trend for the corporation. They also have a very low debt-to-equity ratio, indicating that they have enough equity to easily pay off any funds acquired from creditors. As a creditor I would feel safe in lending them funds for any future projects or endeavors.
This is a crucial measurement as it reflects the ability of firm on selling its products to cover its expenses. High sales lead to high profits which gives company an advantage. In addition, it results the company to get a good reputation and position in the industry. In order to measure the overall profitability of Inditex, some ratios must be counted such as Profit Margin Ratios, Return on Equity and Return to Assets. According to (Table 2), the Profit Margin Ratio of Inditex is 0.14 which is same as H&M’s ratio. This means that both companies have top rank profit in the industry. However, the Return on Assets and Equity for H&M scored higher than Inditex . This may indicate how H&M’s company performing well in the industry,...
Introduction: Leighton Holdings is Australia’s one of the most reputed organization, which is active in engineering and infrastructure, mining and resources, environmental services industries and telecommunications which is listed on the Australian Securities Exchange since 1962. This company has operations in different countries including Australia, South East Asia, New Zealand, Vietnam, China and Middle East. The main focus and activities of Leighton Holdings include market positioning, strategic direction and planning, financial management and corporate and public affairs.
... three quarters of all public expenditures for dental care in Canada is associated with treatment in a private dental facilities, where public insurance is billed as a third-party payer (9). However, only 30% of dentists deal with public insurance (8). The delivery method causes problems between dental service providers and public insurance. Public vs. private setting for dental care is also important to consider due to the disparity that exist with oral health and its access. Low-income and high-risk children (i.e. Aboriginal children) are unable to acquire dental care suffering medically and socially since they cannot afford the cost. Additionally seniors, individuals in long-term care, the homeless etc. are also in this category. Thus, sometimes delivering would be more appropriate in private dental setting, while in others, a public setting would be more ideal.
Among the study’s findings were that the deciding factor of the predictor of bankruptcy should not be only a few ratios, as the measure of a company’s financial solvency may differ as the firm’s situations differ. The important question is to which ratios are to be used and of those ratios chosen, which ratios are given priority weight.
Fletchers started their business in the construction sector in 1909. Timber weatherboard house in Dunedin, New Zealand was their first project and they built it. They remain the leading construction company in New Zealand until 2001. In late 2001, they change their name The Fletcher Building Company on the stock exchange of New Zealand. Their main office is in Penrose, Auckland. They have near 20,000 employees working for them. They are dealing with mainly six different sections of construction work, heavy and light both building products, panels, and laminates distribution in New Zealand; they also distribute construction products in Australia and constructing the new big buildings there.
Asset turnover ratio is used to calculate the efficiency to utilizing total asset for the sales. Use your assets in produce your product productivity and rise the sales to earn more profit. The asset turnover ratio of Nestle and Duty Lady Milk are similar in these 3 years. But, the two asset turnover ratio is considered as a low ratio (unproductive capacity). A low ratio means there will be less efficient of firm in total asset for employed. Nestle does not efficient in using firm’s asset to produce more
According to the annual report in 2015 and 2014, the gross profit margin was 12.21% in 2015, while in 2014 it was 11.45%. This is because the sales in 2015 is higher than the sales in 2014. Besides, net profit margin for this company in 2015 was 38.56% and 35.35% in 2014. This is because the organisation of this company were giving a good act to against their opponents. Other than that, return on asset ratio for this company in 2015 was 23.74% and 23.9% in 2014. This shows that this company in 2015 failed to fully use their assets for generating the company’s