How healthy is your Current Ratio and what action do you suggest? Refer to Pettus or conduct Internet research

This week’s discussion focuses on the financial health of your company. This will help you prepare for the Comp-XM exam.

 

  • Evaluate the Return on Equity of your company. Your Board wants you to increase the ROE. In what ways might you achieve that? What is the value of an attractive ROE?
  • What is your company’s Working Capital? Hint: The information you need is in the Financial Summary table. Be sure to subtract Long Term Debt from Current Liabilities to calculate Current Liabilities. What is the value of knowing your Working Capital? How healthy is your Current Ratio and what action do you suggest? Refer to Pettus or conduct Internet research.
  • Assess your company’s ROS (Return on Sales). How does your ROS compare to the competition? Explain the meaning of your ROS and what you can do to increase the return on sales, if needed?
  • What financial concerns regarding your company would you like to discuss with your colleagues?

Responses to Other Students: Review the posts of at least 2 other student’s and provide meaningful feedback. Refrain from generic feedback, such as simply stating “good job.” Your feedback to other students will be most helpful if you not only point out weak areas but also offer suggestions for improvement. The best feedback takes a 3-stage approach to identify what was done well, weaknesses, and areas for improvement.