FIN 320 Week 2 Learning Team Assignment Financial Performance Case Study

Apr 24th, 2015
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FIN 320 Week 2 Learning Team Assignment Financial Performance Case Study

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Learning Team Assignment: Financial Performance Case StudyFIN/320Memorandum To: Martin ManufacturingFrom: Team ACC: Date: February 20, 2011Subject: Financial Analysis of Martin ManufacturingThis memorandum is to inform Martin Manufacturing management on the financial status of the company. The analysis included information provided from the company's 2006 balance sheet. This data provides us with the market ratios of Martin Manufacturing's debt, profitability, liquidity, assets, and market ratios. After reviewing the company's financial standing, the analysis shows that the company is in need of improving their financial status. The negative factors include the high debt ratio. According to our analysis, the company's debt ratio shows that it has increased significantly. The industry average debt ratio is at 24.5% while Martin Manufacturing is at 57%. This is not a sign for the company. High debt ratio is not good for any company. Martin Manufacturing's income statement advises us that the company earned good profit in 2006. However, the company's operating cost was $1,218,000. Martin Manufacturing's operating expenses seem to be increasing which has the company decreasing in its profitability. We recommend that the company reduce its inventory because the turnover rates. The company's turnover rate suggests that maybe the company is not receiving their payments from customers on time or at a slower pace. This has also affected the company's ratios.The com

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