Company Performance Essay Example | Topics and Well Written Essays - 1250 words

Company Performance - Essay Example It is calculated by getting the difference of the current assets from the value of our stock and any prepayments the company has made. Their total is then divided by the totals for the current liabilities to get the quick ratio (Needles and Powers, 2010). In other words the formula for calculating the quick ratio can be given as, This is the ratio of the company’s current debt to the amount of capital they have invested in the company. This is calculated by dividing the total debt that a company owes their creditors to the amount they have invested in the business (Banjerjee, 2005). It is given by, The company has a total debt ratio of 30.25 in comparison to the industry’s 31.96. This implies that there are other companies that have greater debts than it since their value is less than the industry’s. This ratio is also referred to as the stock turnover and is the ratio of the sales a company makes in a certain trading period to the totals of their inventories. It is calculated by dividing the total number of sales made in the period over the total recording’s of sales made (Clarke, 2002). Thus, it is calculated using the formula, The company has a sales turnover of 3.53 in contrast to the industries 4.15. This means the company is performing dismally when compared to the industry since their indexes are lower (Banjerjee, 2005). It is a measure used in accounting to quantify the effectiveness of a firm in giving out credit facilities along with the collection of debts. It is a ratio that describes the level of activity within an organization (Clarke, 2002). It is calculated using the formula, The company has a receivables turnover ratio of 7.52 which is low compared to the industry’s 19.51. This implies that the company should make a reassessment of their debt collection policies to ensure their money has been collected and is bringing gains to the firm. This is the ratio of the sales the company