Ups Operations

In: Business and Management

Submitted By wawi
Words 623
Pages 3
Case Study Assignment

1996 1997 Liquid Ratio = Liquid Assets / Current Liabilities(50000-16000)/20000= 1:1.7 | Liquid Ratio = Liquid Assets / Current Liabilities(60000-30000)/26000= 1:1.15 | Current Ratio = Current Assets / Current Liabilities50000/20000= 1:2.5 | Current Ratio = Current Assets / Current Liabilities60000/26000= 1:2.31 | Debt ratio = Total debt/Total assets20000/80000*100= 25 % | Debt ratio = Total debt/Total assets46000/120000*100= 38.3 % | Net Profit Ratio = (Net profit / Net sales) × 10019000/250000*100= 7.6 % | Net Profit Ratio = (Net profit / Net sales) × 10014000/200000*100= 7 % | Gross Profit Ratio = (Gross profit / Net sales) × 100109000/250000*100= 43.6 % | Gross Profit Ratio = (Gross profit / Net sales) × 100124000/200000*100= 62 % | Return on Equity = Net Income/Shareholder's Equity19000/60000*100= 31.6 % | Return on Equity = Net Income/Shareholder's Equity14000/74000*100= 18.9 % | Return on Investment = [(Payback - Investment)/Investment)]*100(250000-80000/80000)*100= 212.5 % | Return on Investment = [(Payback - Investment)/Investment)]*100(200000-120000/120000)*100= 66.7 % | Return on Assets = Net income/Total assets19000/80000*100= 23.75 % | Return on Assets = Net income/Total assets14000/120000*100= 11.7 % |

Conclusion:
Simply put; in 1996 the company paid less and gained more (19,000 to 14,000) , with a profitability rate of 7.6% in 96 compared to 7% the next year; there is no doubt that the year 96 was a better year.
In addition the company invested more in inventories 1997 than 1996 the thing that affected the liquidity and made them end the year with zero cash, still ratios of liquidity are almost similar (1:1.7 in 96 to 1: to 1:1.15 in 97) but it seems like the company is expanding its operations since we can see more buildings in our sheet (huge change from 10,000 in 96 to 32,800 97) so that should…...

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