Huffman Trucking Current Financial Position

Liquidity Ratio This take constitutes the democratic financial dimension go for to test a companions liquidity by deriving the portion of reliables assets purchasable to cover veritable liabilities. This commandment consists of dividing the veritable assets by the oc flow rate liabilities. In the case of Huffman Trucking, the trus twainrthy assets represent $ 111, 728; flowing liabilities represent $ 88, 827. When applying the formula, the current ratio comes fragment through to 1.3. This formula is called the current ratio. This number measures the short confines power to pay maturing obligations (Weygandt, Kimmel, & Kieso, 2010) and to come over unexpected needs for cash. This ratio is a more dear than a working great ratio. after review of this ratio, it seems as though there seems to be a lack of current assets to signify a rosy-cheeked ratio in our opinion. We cheer reducing current liabilities in coiffe to obtain a healthier ratio. This could be do by perhaps investiture in a pine term liability influx of cash to boost the current assets or reducing the current liabilities. Profitability Ratio For this atomic number 18a, we opted to use the reelect on assets ratio. Return on assets is a measure of how effectively the self-coloreds assets are being used to flummox lolly (Weygandt, Kimmel, & Kieso, 2010).

Return on assets is mensural by dividing earn income by medium assets. later doing the calculations, we took $ 19,211 by $ 220,003 ( add up for the past two years). We obtained an average of 8.7%. We feel this is high than the industry average except not as undecomposed as it could be. Landstar Systems has an average of 15.36 (YCharts, July 2010). This is high, that we would recommend striving for a double digit average on this ratio. Solvency Ratio For the solvency ratio, we opted to look at that debt to count assets ratio. This formula is calculated by dividing total debt (both current and long-term liabilities) by total assets. This number will transmit indicate the companys pointedness of leverage. Currently,...If you want to wee a full essay, localise it on our website: Ordercustompaper.com

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