Jim Reed

Jim beating-reed instrument II is the possessor of reed instruments haberdasher since 1976. The company is lining financial difficulties. Therefore, Jim is seeking for financial aid by the inaugural Virginia National Bank. A 30-day deadline is finis in on a $130,000 bank note. beating-reed instrument has $85,000 specie in reserves and $491,000 in arsenal. To meet the financial obligations of the business, reed instrument mustiness switch a portion of the stock-take into cash. Financial proportionality analysis will be provided to assess the past, present and coming(prenominal) standings of the company, and to catch the best methods to restore the financial standings of the business. The ratios of reed instruments haberdashers, as line of battlen in exhibit 16.1, show that the large amounts of descent acquire negatively impacted the business. The inventory employee disorder of Reeds Clothier is 2.9, as shown in Exhibit 16.1. The patience norm has an inventory overthrow of 7.0. Reeds Clothier in like manner has a gloomy debauched ration, when compared to the industriousness average. The low profligate ratio shows an softness to convert current assets, excluding inventory into cash. The receivables overturn and the average arrangement pointedness are dickens special indicators of financial troubles. The low receivables turnover is a bell ringer that the business in inefficient to collect on its tier receivables. The company has an average collection period of 74.

1 days versus the pains average of 47.4 days. The payable turnover ratio is 7.0 less than fractional the 15.1 industry standard. These two ratios propose Reeds softness to collect its receivables and its inability to revert its debts to creditors. Exhibit 16.1 Liquidity Ratios Reeds Clothiers Industry up-to-the-minute Ratio2.0, 2.7 Quick Ratio 0.9 1.6 Receivables turnover 4.9, 7.7 Average Collection uttermost 74.1, 47.4 Efficiency Ratios Total substance disorder 0.9, 1.9 Inventory Turnover 2.9, 7.0 Payable Turnover 7.0, 15.1 lucrativeness Ratios crude Profit margin 0.3 33.0 internet Profit Margin 5.0, 7.8 proceeds on Common virtue 0.2, 25.9 Inventory simplification change Reeds Clothiers...If you want to get a mount essay, order it on our website: Ordercustompaper.com

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