Anandam Company Additional Funding
Essay by Aquisha Dreylyn • August 28, 2017 • Case Study • 327 Words (2 Pages) • 1,268 Views
Problem/Issue
The Anandam manufacturing company approached the local bank for additional funding to meet the growing requirements of his garment manufacturing company. The main issue recognized is whether to approve the loan by investigating their income statement and balance sheet.
Objective
To compare the ratios from the given to gather relevant information in order to decide whether or not the bank will approve the 50 million loan.
Relevant Facts
Anandam Ratios | Industry Average Ratios | |||
2012 - 2013 | 2013 - 2014 | 2014 - 2015 | 2014 - 2015 | |
Current Ratio | 2.53 : 1 | 1.79 : 1 | 1.60 : 1 | 2.30 : 1 |
Quick Ratio (Acid Test Ratio) | 1.30 : 1 | 0.92 : 1 | 0.79 : 1 | 1.20 : 1 |
Accounts Receivables | 6 times | 2.88 times | 3.42 times | 7 times |
Debt to Equity Ratio | 47.06% | 46.89% | 64.50% | 35% |
Net Profit Ratio | 18.20% | 14% | 10.50% | 18% |
Inventory Turnover Ratio | - | 3.11 times | 2.56 times | 4.85 times |
Return on Equity Ratio | 3.03% | 4.20% | 4.20% | 22% |
Days Sales Outstanding/ Receivables Collection Period | 60.83 days | 126.73 days | 106.45 days | 52 days |
Interest Coverage Ratio | 9.66 times | 7.07 times | 4.52 times | 10 times |
Working Capital Turnover Ratio | - | 5.42 | 2.21 | 8 |
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