Top Posters
Since Sunday
47
s
32
9
k
8
p
7
B
7
o
7
n
7
x
6
b
6
k
6
C
5
New Topic  
pompa pompa
wrote...
Posts: 997
Rep: 0 0
5 years ago
Given the following balance sheet, income statement, historical ratios and industry averages, calculate the Pulp, Paper, and Paperboard, Inc. financial ratios for the most recent year. Analyze its overall financial situation for the most recent year. Analyze its overall financial situation from both a cross-sectional and time-series viewpoint. Break your analysis into an evaluation of the firm's liquidity, activity, debt, and profitability.
   Income Statement
   Pulp, Paper, and Paperboard, Inc.
   For the Year Ended December 31, 2013


   Balance Sheet
   Pulp, Paper, and Paperboard, Inc.
   December 31, 2013


   

Historical and Industry Average Ratios
   Pulp, Paper and Paperboard, Inc.
Textbook 

Principles of Managerial Finance


Edition: 14th
Authors:
Read 343 times
4 Replies
Replies
Answer verified by a subject expert
UlainUlain
wrote...
Top Poster
Posts: 1011
5 years ago
Sign in or Sign up in seconds to unlock everything for free
More questions for this book are available here
Historical and Industry Average Ratios
   Pulp, Paper and Paperboard, Inc.


LIQUIDITY: The liquidity of the firm is on target with the industry standard in 2013 and shows no trend since 2011. The firm's liquidity is stable.
ACTIVITY: Inventory and accounts receivable management has deteriorated since 2012 and is inferior when compared to the industry standard. The low inventory turnover may be caused by overstocking and/or obsolete inventories. The high average collection period may have resulted from poor collections procedures or from relaxed credit terms. Further investigation is necessary to determine the cause of the variances.
DEBT: The firm has less debt than the industry average. The trend since 2011 has been toward reducing the debt ratio. The firm, therefore, is subject to less financial risk than any other firm in the industry.
PROFITABILITY: Although the gross profit margin is inferior to the industry average, the operating and net profit margin far exceed the standards, boosting return on total assets and return on equity. The trend in the gross profit margin is unfavorable and may either be caused by a slide in product prices or an escalation in cost of sales. The cause of the poor gross profit margin should be investigated.
Overall, the firm needs to focus attention on inventory and accounts receivable management and the cause of the poor gross profit margin. In general, the firm is in good financial condition.
This verified answer contains over 240 words.
1

Related Topics

wrote...
A year ago
Good , thank you
wrote...
A year ago
Good,thank you
wrote...
2 weeks ago
Thx
New Topic      
Explore
Post your homework questions and get free online help from our incredible volunteers
  238 People Browsing
 510 Signed Up Today
Related Images
  
 174
  
 167
  
 76