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Current Ratio Analysis Paper

769 Words4 Pages

Five Below is a very successful company in my opinion. Five Below way of operating their business is very profitable. Five Below has been around a short period of time but is still very much a competitive discount retail stores. These store earnings is only in the thousands however, the retail store is on a great path. Throughout this paper you will read about the profit numbers in Five Below Inc. This paper will discuss the cash ratio, current ratio, quick ratio, and other critical information about the company. Cash Ratio (0.65) Cash is very important for a business to have. A business is only in business to make money. Cash is the only way a business stays in business. Five Below has more current liabilities than current cash. This means …show more content…

Cash ratio tells if a company knows how to pay its debt. This is very important for investors, employees, and customers. The current ratio for Five Below was 2.92. In my opinion this is good for a company. The percentage is a high percentage. This mean they are about behind their word. In this case the asset amount was very high for Five Below. Assets are very important for a company to have. The current asset amount was $339,789 which was a good number in my opinion. The current liabilities for the company were $116,563 which is fairly low compared to the asset amount …show more content…

This is considered great percentage in my eyes. The debt to assets tells if a company is financed through equity or debt. Five Below has a low debt to assets ratio which is good for the company. It means they are getting financed more through investments and equity. Any time you hear low debt about a company is very good. Some companies will get in more debt rather which leads to a financial debt. The company’s total liabilities were $169,131 which was divided by the total assets amount of $500,536. Receivable Turnover Ratio (18.29) Receivable Turnover ratio was phenomenal. This means inventory is done every 18 days. The receivable turnover ratio lets you know if the company is actually making sales. In receivable turnover a company must be knowledgeable about investment. A company does not want to invest too much in assets and in the end not have anything to show for it. This means the inventory changes every 20 days. WEEK FOUR

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