Interpreting Financial Results
Laura Harper
FIN571
May 19, 2014
Prof. Joel Spina
Interpreting Financial Results
This paper is to define how important financial ratio is in a business. Financial ratios are key factors to determine how well a business is doing financially... The financial ratios can be used internally and externally to determine if the business is financially stable. In this assignment there will be financial comparison of ratios for each of the three years 2014 -2013; 2013 -2012; and 2012 -2011) the interpretation of those ratio’s results will be calculated against CONSOL Energy historical data, as well as the industry benchmark. Determininge how financially stable CONSOL Energy Inc has been over the last three years (Parrino, Kidwell, & Bates, 2012).
Current ratio
The current ratios not liquidity for 2014-2013 at 1.16, and the firm does not have the ability, even in the short term, to pay its debt payments” (Parrino, Kidwell, & Bates, 2012). Current ratios = 2013-2012 =1.09, 2012-2011, =1.03. calculations below
Current Ratio=Current Assets/Current Liabilities
2014-=1671.9 /1192.1 = 1.40
2013 =1445,592/1192.1 = 1.21
2012 = $2.984,686/ =$2,507.07 =1.20
2011 = $3,437,071/ $2.775,496 = 1.24 (guru, 2014)
The Quick ratios still not liquidity so the company will not have the ability to make debt payments (Parrino, Kidwell. & Bates, 2012)
Quick Ratio = Current assets -Inventory/ Current liabilities
2014 = 1671.9 -156,185=139.466/1192.1 = 8.54
2013 -1671.9 -157,914 =141.195/1192.1 = 8.44
2012 =1671.9 -170,808 =154.089/1192.1 = 7.74
2011 =1671. 9-258,335=241,616 /1192.1 =4.93 (guru, 2014)
Comparisons:2014-2013 ==1.01, 2013-2012 =1.09, 2012-2011 = 1.57
Inventory turnover = Cost of goods sold /Inventory
2014 = 1,541/156,185 =9.87
2013= $876.46/ 238.35 =3.68
2012 =$866.24/.266.54 =3.25
2011 =$632.50/$3,796 = 6.01 (guru, 2014)
Comparisons= 2014-2013 =1.04, 2013-2012 =1.96, 2012-2011 = 167
Days’ sales...