Question

As you retrieve this information, consider companies’ financial ratios, including activity ratios, debt ratios, and profitability and market ratios. Also, consider what you, as a financial manager, would have done differently or suggested as improvements.

Background: Describe both of the firms and their management, including their strategic objectives. Provide sufficient detail to support the rest of your analysis. III. Evaluation of the Firms

A. Analyze companies’ cash flow management practices for the last three fiscal years, including cash, accounts receivables, accounts payable, fixed assets, and inventory. Cite specific examples and figures to illustrate.

B. Analyze companies’ working capital cash flow management practices, including cash, accounts receivables, accounts payables, fixed assets, and inventory. Cite specific examples and figures to illustrate.

alance Sheet

All numbers in thousands

Period Ending	9/30/2017	9/24/2016	9/26/2015
Current Assets
Cash And Cash Equivalents	20,289,000	20,484,000	21,120,000
Short Term Investments	53,892,000	46,671,000	20,481,000
Net Receivables	35,673,000	29,299,000	30,343,000
Inventory	4,855,000	2,132,000	2,349,000
Other Current Assets	13,936,000	8,283,000	15,085,000
Total Current Assets	128,645,000	106,869,000	89,378,000
Long Term Investments	194,714,000	170,430,000	164,065,000
Property Plant and Equipment	33,783,000	27,010,000	22,471,000
Goodwill	5,717,000	5,414,000	5,116,000
Intangible Assets	2,298,000	3,206,000	3,893,000
Accumulated Amortization	-	-	-
Other Assets	10,162,000	8,757,000	5,422,000
Deferred Long Term Asset Charges	-	-	-
Total Assets	375,319,000	321,686,000	290,345,000
Current Liabilities
Accounts Payable	74,793,000	59,321,000	60,671,000
Short/Current Long Term Debt	18,473,000	11,605,000	10,999,000
Other Current Liabilities	7,548,000	8,080,000	8,940,000
Total Current Liabilities	100,814,000	79,006,000	80,610,000
Long Term Debt	97,207,000	75,427,000	53,329,000
Other Liabilities	40,415,000	36,074,000	33,427,000
Deferred Long Term Liability Charges	2,836,000	2,930,000	3,624,000
Minority Interest	-	-	-
Negative Goodwill	-	-	-
Total Liabilities	241,272,000	193,437,000	170,990,000
Stockholders' Equity
Misc. Stocks Options Warrants	-	-	-
Redeemable Preferred Stock	-	-	-
Preferred Stock	-	-	-
Common Stock	35,867,000	31,251,000	27,416,000
Retained Earnings	98,330,000	96,364,000	92,284,000
Treasury Stock	-	-	-
Capital Surplus	-	-	-
Other Stockholder Equity	-150,000	634,000	-345,000
Total Stockholder Equity	134,047,000	128,249,000	119,355,000
Net Tangible Assets	126,032,000	119,629,000	110,346,000

Answer 1

	2017	2016	2015
Debt equity Ratio	0.73	0.59	0.45
Current Ratio	1.28	1.35	1.11
Quick Ratio	1.23	1.33	1.08
Cash Ratio	0.74	0.67	0.41
Book Value per share	3.74	4.10	4.35

Year	2017	2016	2015
Accounts Receivable	35,673,000	29,299,000	30,343,000
Accounts Payable	74,793,000	59,321,000	60,671,000
Fixed Assets	74,793,000	59,321,000	60,671,000
Cash	20,289,000	20,484,000	21,120,000
Inventory	4,855,000	2,132,000	2,349,000

It is evident from the  ratios and critical figures that company is not able to generate surplus/enough cash. Payables are on increasing trend and Receivables are also increasing. company is not able to reduce its debtors collection periodd due to which it does not generate enough cash to pay out its account payables.

Another reason of lower cash levels would be company investing in Fixed Assets and long term investments.

Further, Inventory levels have increased at an alraming level in 2017, company is not able to churn out its inventory. lower inventory churn out results in lesser sales turnover.

All above reasons have resulted into lower book value in 2017.

While the other ratios seems to be fine, Debt equity ratio is on lower side. if company has plans to expand, it should leverage more on debt.