Access over 20 million homework & study documents

MBA FPX CU Performance Evaluation of Ace Company Essay

Content type
User Generated
Subject
Accounting
School
Capella University
Type
Essay
Rating
Showing Page:
1/6
Running Head: Performance Evaluation
Performance Evaluation
Kendra Holcomb
MBA-FPX 5010
Capella University
April 4, 2021

Sign up to view the full document!

lock_open Sign Up
Showing Page:
2/6
2
Introduction
The purpose of this report is to analyze the financial performance of Ace Company. Ace
Company is seeking a 3 million dollar, ten -year loan in order to obtain production equipment
and cultivate complementary software. After the financial arrangement is analyzed, the findings
will help assess if the banks will ultimately provide Ace with the loan. The report will include a
thorough analysis of the accounts receivable trends and the turnover rate comparison.
Analysis for Accounts Receivable
Measuring the money that is indebted to a company for goods and services already
rendered is accounts receivable. Companies through accounts receivable are allowed to sell
merchandise by using credits that will enable quicker and more frequent purchases. The major
downside to using accounts receivable is just like with all forms of credit, clients can default, and
the company ultimately does not receive payments. The trends in Ace Company's case show a
positive increasing climb in accounts receivables since 2015 (Appendix A). The turnover
analysis ratio increased from almost 5.00 times in 2016 to 0ver 5.05 times the following year.
This increase is an improvement because it shows a slight increase in the company’s clients
paying bills in a timely fashion, indicating minimal lousy debt. While there is an increase, the
ratio is still low overall and shows debt being collected on average every 70 days throughout
2017.
Compared to the industry average turnover rate, which is only ten times per year, average
debt collected every 37 days, Ace turnover ratio is meager and is a red flag. Although Ace has
had improvements over the year, it fails the meet the industry's average. Seeing that Ace has

Sign up to view the full document!

lock_open Sign Up
Showing Page:
3/6

Sign up to view the full document!

lock_open Sign Up
End of Preview - Want to read all 6 pages?
Access Now
Unformatted Attachment Preview
Running Head: Performance Evaluation Performance Evaluation Kendra Holcomb MBA-FPX 5010 Capella University April 4, 2021 2 Introduction The purpose of this report is to analyze the financial performance of Ace Company. Ace Company is seeking a 3 million dollar, ten -year loan in order to obtain production equipment and cultivate complementary software. After the financial arrangement is analyzed, the findings will help assess if the banks will ultimately provide Ace with the loan. The report will include a thorough analysis of the accounts receivable trends and the turnover rate comparison. Analysis for Accounts Receivable Measuring the money that is indebted to a company for goods and services already rendered is accounts receivable. Companies through accounts receivable are allowed to sell merchandise by using credits that will enable quicker and more frequent purchases. The major downside to using accounts receivable is just like with all forms of credit, clients can default, and the company ultimately does not receive payments. The trends in Ace Company's case show a positive increasing climb in accounts receivables since 2015 (Appendix A). The turnover analysis ratio increased from almost 5.00 times in 2016 to 0ver 5.05 times the following year. This increase is an improvement because it shows a slight increase in the company’s clients paying bills in a timely fashion, indicating minimal lousy debt. While there is an increase, the ratio is still low overall and sho ...
Purchase document to see full attachment
User generated content is uploaded by users for the purposes of learning and should be used following Studypool's honor code & terms of service.

Anonymous
Great! Studypool always delivers quality work.

Studypool
4.7
Trustpilot
4.5
Sitejabber
4.4