Assesing Company’s finance Essay

SALES GROWTHDuring the four- socio-economic class hitch stop December 31, 2008, SciTronics sales grew at a 20.69 % ($244,000/$115,000) = (1+r) 4 compound rate. at that place were no acquisition or divestitures.PROFITABILITY RATIO How Profitable is the order?1. SciTronics profit as a percentage of sales in 2008 was 5.73% (14000/244000)2. This correspond an increase from 3.4% (5000/147000) in 2005.3. SciTronics had a essence of $112, 000 (75,000+20,000+7,000+10,000) of capital at closing 2008 and earned before interest but after taxes (EBIAT) $16,000 (26,000-10,000) in 2008. Its upshot on capital was 14.29% (16,000/112,000) which represents an increase from the 8.11% (6,000/74,000) earned in 2005. 4. SciTronics had $75,000 of owners comeliness and earned $14,000 after taxes in 2008. Its return on equity was 18.66% ($75,000/$14,000), which represents an rise from the 8.19% ($5,000/$61,000) earned in 2005.ACTIVITY RATIO How Well Does the union Employs Its Assets?1. Total Asse ts turnover for SciTronics in 2008 can be calculated by dividing $244,000 (net sales) into $159,000 (total assets). The turnover deteriorated from 1.58 times in 2005 to 1.53 in 2008.2. SciTronics had $66,000 in accounts receivables at division end 2008. Its average sales per day were $668.49 ($244,000/365) during 2008 and its average collection period was 98.73 days. ($66,000/668.49). This represents an improvement from the average collection period of104.29 ($42,000/402.73) days in 2005.3. SciTronics manifestly needed $29,000 of scroll at closing 2008 to support its opeproportionns during 2008. Its activity during 2008 as measured by the cost of goods interchange was $74,000. (COGS). It therefore had an inventory of turnover of 2.55 (74,000/29,000) times. This represents an improvement from2.04 (43,000/21,000) times in 2005.4. SciTronics had net muckle assets of $18,000 (net fix assets) and sales of $244,000 in 2008. Its fixed asset turnover proportion in 2008 was 13.56 (244 ,000/18,000), a deterioration from 16.33 (147,000/9,000) in 2005.LEVERAGE RATIOS How Soundly Is the Company Financed?1. SciTronics ratio of total assets divided by owners equity increased from 1.52 (93,000/61,000) at year end 2005 to 2.12 (159,000/75,000) at year-end 2008.2. At year-end 2008, SciTronics total liabilities were of its total assets was 52.83% (48,000+7000+20000+9000/159000), which compares with 34.4% (21,000+11,000)/93,000).3. The market value of SciTronics equity was $175,000,000 at December 31, 2008. The total debt ratio at market was 32.4% (84,000/84,000+175,000).4. SciTronics earnings before interest and taxes (operating income) were $26,000 in 2008 and its interest charge were $2,000. Its times interest earned were 13 times. This represents an improvement from the 2005 level of 10 times.5. SciTronics owed its supplies $6,000 at year end 2008. This represents 8.1%(6,000/74,000) of cost of goods sold and was a decrement from 11.63% (5,000/43,000) at year end 2005. The company appears to be more prompt in paying its suppliers in 2008 than it was in 2005.6. The m unrivaledtary riskiness of SciTronics decreased between 2005 and 2008.LIQUIDITY RATIOS How Liquid Is the Company?1. SciTronics held $133,000 of up-to-the-minute assets at year-end 2008 and owed $48,000 to creditors due to be paid within one year. Its current ratio was 2.77 ( 133000/48000 ), a decrease from the ratio of 3.90 (82000/21000) at year-end 2005.2. The quick ratio for SciTronics at year end 2008 was 2.16 (133,000-29,000)/48,000), a decrease from the ratio of 2.90 (82,000-21,000/21,000) at year-end 2005.