ACC 291 Week 5 Ratio Analysis Memo- CEO-Kudler Foods.

May 5th, 2015
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ACC 291 Week 5 Ratio Analysis Memo- CEO-Kudler Foods.University of PhoenixTo: CEO-Kudler Foods.From: Team BDate: xxxxxxThis memo is in regard to a recent horizontal and vertical analysis performed on Kudler Foods. The analysis completed was to inform the company of potential interests from different users. The users will be able to use ratios calculated to reveal performance and the current position of the company. The vertical and horizontal analysis is attached along with calculations of liquidity, profitability, and solvency ratios.The liquidity, profitability, and solvency ratios allow users to identify the financial health of Kudler Foods. The liquidity ratios include the current ratio, acid-test ratio, and inventory turnover. Kudler Fine Foods has no accounts receivables so there was no need for a receivables turnover calculation. The liquidity ratios show that the amount of liquid assets is high in comparison to the industry average. This means that Kudler Foods has assets that can be converted to cash very quickly. Creditors would look at these calculations and be appeased by the ability Kudler Foods has to pay their short-term liabilities.The profitability ratios calculations included asset turnover, profit margin, return on assets, and return on common stock-holder equity. The ratios calculated show by use of profitability ratios the company financial position is worrisome. This is said because ROA is low. When ROA is low then the company is using less

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