Riordan Financial status and analysis

Summary of Riordans fiscal status Figures in Riordans monetary statements and the computations of its financial dimensions suggest that the fraternity is in a precarious financial state. While Riordan has somewhat working capital and an unexceptionable sure ratio, its quick ratio (which is a go bad indicator of a caller-ups health) falls on a tear down foot acceptable standards. At 56%, its debt to equity ratio is excessive by industry standards and implies that the company heavily relies on debt to quilt operations. While it generated a positive net profit in 2005, its profit margin and return on assets are humiliate than that of other businesses within its industry--this suggests that Riordan may create problems regarding profitability. Financial compendium Riordan does not have enough property to pay stumble its current liabilities and long debt. This may mean that Riordan is having problems converting assets to capital, and may be danger of bankruptcy--c omparing its cash to its debts shows that Riordan appears to be relying on long-term debt to survive. Riordan as well as has a genuinely(prenominal) high inventory, which means that they are having difficulties selling products for profit. A vast chunk of its assets are also tied up to receivables--suggesting that the company may be having problems collecting payment.

On a positive note, its current ratio is close to the ideal, which signals that Riordans management is good in managing its cash flows. However, Riordans quick ratio (which is a better indicator of a companys financial health) comes out as very(prenominal) low compared to acceptable standards. Its debt to equity ratio is also very high, further affirming that it r! elies too much on debt to finance its operations. As such, playing institutions may be less willing to lend financial assistant to the company. In addition to this, while Riordans sales, plebeian margin, operating profit, and net... If you deprivation to get a full essay, night club it on our website: OrderEssay.net

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