Dr. Riordan, a professor of chemistry who obtained several(prenominal) patents qualified to processing polymers into high tensile potency charge plate substrates, founded Riordan Manufacturing. Riordan Manufacturing is a worldwide plastics manufacturer. The company employs 550 people with probable cabbage of $46 million. The company is completely owned by Riordan Industries, a Fortune 1000 enterprise with revenues in surplus of $1 billion.
This paper will summarize the pecuniary state of Riordan Manufacturing, Inc. (RMI) found numerous financial symmetrys, used in conjunction with the financial statements, to analyze the companys financial condition.
LIQUIDITY RATIOS: short SOLVENCY
dining table 1: Current Ratio
The current balance is the peak of the degree to which current assets cover current liabilities. A proportion of more than one suggests that it can pay most of its debts at that point in time. The ability to effectively turn products into interchange is a good sign of a companys financial state.
The hobby table provides a comparison of Riordans current dimension for 2004 and 2005:
2005 2004
Current assets $14,555,092 2.09 times$14,643,4562.
43 times
Current liabilities$6,974,094 $6,029,696
Current assets are change integrity by current liabilities to determine the current ratio. Riordans current ratio is 2.09, and this suggests that the company is efficient in operating its business cycle. The persistence ratio is 2.04. Riordans current ratio is above perseverance average, which means that Riordan is able to meet short-term obligations or play short-term characterors.
ACTIVITY RATIOS: ASSET LIQUIDITY, ASSET MANAGEMENT EFFICIENCY
Table 2: Accounts Receivable Turnover Ratio
The accounts receivable (A/R) turnover ratio reflects the relationship between unpaid credit sales to good credit sales. It indicates, in general, the effectiveness (or lack of it) of a firms credit policies and cash collection...If you want to get a full essay, stray it on our website: Orderessay
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