ipl-logo

Vanguard Group Financial Analysis Paper

860 Words4 Pages

Financial analysis has used to determine Vanguard group financial condition and performance whereby, the items in the balance sheet are compared with those items in the statement of financial performance. This is done because items in the statement of financial position have an impact on those in the statement of financial performance. The assets in the balance sheet have an influence on the items in the income statement such as the revenues and expenses. The financial condition of Vanguard Group is determined by establishing the liquidity position and the financial risk of the company. The liquidity risk is determined using the current ratio and the quick ratio. The current ratio and the quick ratio are fairly constant over the three years showing stability in the liquidity position of the company. In comparison to the industrial averages, both ratios are higher. The current ratio for 2007 is 1.67 in comparison to the industrial average of 1.6 while the quick ratio is 0.96 compared to the industrial average of 0.9. This is an indication …show more content…

Over the years, there has been an increasing trend in this ratio and this shows that the company ability to meet the interest expense on the debts is increasing. The ratio is 5.53 times for the company while the industrial average ratio is 4 times. The company will not have difficulties in paying interest expenses. In comparison to the industrial averages, the company boasts of having a high ratio and this is a good indicator. Financial institutions will be willing to lend to this company as the probability of losing their money is low. However, the company’s dependability on debt capital in financing majority of assets is high and this can be evidenced by the gearing ratio which is more than one. This shows reliance on more debt capital than equity by the firm. This could be as a result of the ability by the company to assess more debt

Show More
Related

Xacc/280 Week 3 Financial Ratios Paper

422 Words | 2 Pages

Common liquidity ratios are the current ratio and the quick ratio. The current ratio is calculated by dividing current assets by current liabilities. This can help a business help pay off debt. "As a quick ratio is a liquidity ratio that measures the ability of a company to pay its current liabilities when they come due with only quick assets. Quick assets are current assets that can be converted to cash within 90 days or in the short-term.

Read More

Kohl's Financial Analysis Paper

427 Words | 2 Pages

The focus of this paper is to profile an authentic assessment on Kohl’s Corp. Kohl’s was organized in 1988 and the state of incorporation is Wisconsin. The nature of Kohl’s operation is a family-based, value-angled department store that focuses on selling modestly priced selected national brand apparel, including but not limited to footwear, various accessories, beauty and select home products. Their stores usually carry a steady merchandise assortment based regional preferences and demographics. Kohl’s has a website for shopping in store, as well as items only available for only on-line purchases. Kohl’s focus is to cater to in-store accessibility including locations close to home, nearby parking, trouble-free accessible entry, well informed

Read More

Financial Ratios For Dollar Tree

703 Words | 3 Pages

I feel that it is good to have a ratio 2 or lower because it will show that they are using their current asset. All creditors like to see a higher current ratio than a lower one. It doesn’t look bad when you have a good ratio because it is meeting all

Read More

Lockheed Martin Corporation: Debt To Equity Ratio

231 Words | 1 Pages

Lockheed Martin Corporation has a debt to equity ratio of 14.86 in 2015 and 9.89 in 2014. These ratio’s show Lockheed Martin Corporation financing from creditors in relation to the investors. Since my company has a higher ratio it means that they are considered more risky to creditors and investors. Lockheed Martin Corporation debt to equity ratios shows that the investors haven’t funded the company as much as creditors have. The investors don’t have as much skin in the game as the creditors do.

Read More

Dollarama Company Case

990 Words | 4 Pages

The debt to ratio is a ratio that compares a firms total liabilities and shareholders’ equity. It shows the proportion of the amount of money invested by the business owners as well as external entities. Debt to Equity Ratio = Total Liabilities/Shareholders’ Equity = $80,994/$931,490

Read More

Target Financial Analysis Paper

157 Words | 1 Pages

Target Corporation is the second largest discount retailer store in the United States. Target headquarter is in Minneapolis, Minnesota. Target started in the 1970’s, it began expanding the store nationwide in the 1980’s. Target sell high quality, on trend assortment of general merchandise, electronics, clothing, and food at attractive prices in clean, spacious, and guest friendly environment. Currently Target operates around 1,834 stores throughout the United States and employed over 341,000 both full and part time employees in 2016.

Read More

Verizon Financial Analysis Paper

1416 Words | 6 Pages

Verizon Communications Inc. Verizon Communications Inc. popularly known as “Verizon” is an American telecom giant headquartered in New York City. Major products and services offered by Verizon are fixed-line and cellular telephony, broadband and fixed line internet services, digital TV and network services, and global internet protocol backbone networks. Industry Description Verizon Communications is a major player in the following industries: • Wired Telecom Carriers in the USA This industry provides long distance and local voice communication services using the public switched telephone network. Industry operators also generate revenue by providing internet access and video services and by wholesaling access to their networks for a variety of purposes (IBISWorld report 51791a).

Read More

Current Ratio Analysis Paper

616 Words | 3 Pages

Current ratio The current ratio is normally ,used to indicate the ability of the company to pay its short term liabilities such as payables and debts using its short term assets like inventory, cash and receivables. If the current ratio is high, the company is more capable of paying the obligations (Brigham, 2013). If the ratio is below one, it indicates that the company cannot be able to pay its debts if they become due at that point Current ratio = current assets / current liabilities Apix Printing = 852,608 / 734,760 =

Read More

Financial Analysis Of Lululemon

876 Words | 4 Pages

Operational liabilities include accounts payable, taxes payable, pension obligations, etc. The debt liabilities include notes payable, other short-term borrowings, the current portion of long-term borrowings, and long-term borrowings. The debt-equity ratio is leveraging to compare a company's total liabilities with its total shareholders' equity (investopedia.com). This is a measurement of how much in the future suppliers, vendors, and creditors have committed to the company in contrast to shareholders` commitment. To a larger extent, similar to the debt ratio, a lower ratio (normally in percentage) means that a company is using less leverage of the debt and has a stronger equity

Read More

Comparison Of Next Plc And Merlin Entertainment

594 Words | 3 Pages

Companies with higher equity ratio are more favourable as it shows the sustainability of company to the creditors (Khan, 2004). Equity Ratio Formula Total Equity\Total Assets Companies Next Plc Merlin Entertainment Plc Years 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 Total Equity 133.6 232.2 222.7 285.7 286.3 505 555 617 944 1063 Total Assets 1693.5 1792.3 1854.2 1893.6 2144.6 2022 2236 2509 2702 2786 Equity Ratio 0.08 0.130 0.12 0.15 0.13 0.25 0.25 0.25 0.35 0.38 It is noticed from the table and graph provided above that Merlin Entertainment is performing as compared to Next Plc in terms of equity ratio as their equity ratio is much higher. This means that Merlin would have positive image in front of their creditors as their higher equity ratio shows the sustainability of the company.

Read More

Gemini Electronics: Financial Analysis

1341 Words | 6 Pages

Though having dropped from 0.65 in 2008 to 0.63 in 2009, this is still significantly higher than 0.5. This means that 63% of Gemini’s assets are financed by debt, thus the lenders bear the greatest risk. This is because Gemini financed all land, equipment and some patents with term loans. Though the Debt to Equity Ratio conveys the same information as the Debt Ratio, we see that from 2008 to 2009 this number has dramatically dropped. As opposed to using 1.87 in borrowed funds compared to each dollar provided by shareholders like in 2008, Gemini now only uses 1.71.

Read More

Case Study Coke Vs Pepsi

1416 Words | 6 Pages

This will be vital information for a stockholder or creditor that would get involved with the company to have. A lender or investor would prefer companies that have enough capital to keep their business running and avoid incurring large debts to do so. For this ratio, the rule would be 1.0 or lower which would be a measured good ratio. Those that go under 0.5 are best. From the Coca-Cola and Pepsi financials statements, we can see that these companies can pay out their current liabilities.

Read More

Ratio Analysis Of Nike

4014 Words | 17 Pages

However, Nike seems to be doing the opposite, which is giving a high ratio. Debt per Equity Ratio = Total Debt/Total Equity  The debt per equity ratio shows to what extent a company’s assets are either financed by debt or equity. A high ratio indicates aggressiveness on behalf of the company to finance its growth through debt.

Read More

Swot Analysis Of Grace Kennedy

904 Words | 4 Pages

Exposure to credit risk is managed in part by obtaining collateral and corporate and personal guarantees. Counterparty limits are established by the use of a credit classification system, which assigns each counterparty a risk rating. Risk ratings are subject to regular revision. Liquidity Risk Liquidity risk is the risk that the company is unable to meet its payment obligations associated with its financial liabilities when they hall due and to replace funds when they are withdrawn. GK’s liquidity management process, as carried out within the Group through the ALCOs and treasury departments includes: o Monitoring future cash flows and liquidity on a daily basis o Maintaining a portfolio of highly marketable and diverse assets that can easily be liquidated as protection against any unforeseen interruption to cash flow o Maintaining committed lines of credit Currency Risk Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.

Read More

Khind Holdings Berhad Swot Analysis

2240 Words | 9 Pages

The current ratio is a liquidity and efficiency ratio that measures a firm's ability to pay off its short-term liabilities with its current assets. In the year 2012, KHB had a current ratio of 1.688 but it comes to decrease in 2013 to a 1.642. The ratio in the year 2014 was 1.670 indicating a slight increase. The competitor of KHB, the PMMB had a current ratio of 4.785, 4.012 and 3.622 from the year 2012 to 2014 respectively. A current ratio should be more than 2.0 as a higher current ratio indicates a more promising current debt payments.

Read More

More about Vanguard Group Financial Analysis Paper

Open Document