Financial Statement part 2 Essay Example | Topics and Well Written Essays - 1250 words

Financial nar proportionalityn part 2 - Essay ExampleThe main operation is carried out in the United States exclusively there ar also several Home Depots located in Mexico, Canada, Peoples majority rule of China. Focusing on a long term scenario the fabrication is unpredictable, but the development of the home industry can lead to a promising future if the housing market remains stable (Roush, 1999).The real ratio indicates whether the incumbent assets of the company are able to pay off its short term liabilities and obligations. The current ratio of the company that is 1.15 is life-threatening. As too high current ratio or too petty(a) current ratio is not a good indicator of the mobileity authority of the company. Here the ratio indicates that the company has a sound liquidity condition to meet its short term liabilities. Current assets are 0.3 which indicates that the company should increase the current ratio to 1 because a higher current ratio indicates the liquid posi tion of the company.The buffet on asset is 20% is fairly good as it indicates the profitability position of the company. A company with high return on asset indicates that how a company is able to picture profit by employing the asset of the company. The higher return signifies that the management is able to well utilize its asset. The return on capital employed is 63% which indicates that the company is has a strong asset base. It signifies the ability to sire revenue from its current capital base. The debt ratio that is the debt equity ratio indicates or compares the shareholders equity with that of the total liabilities of the company. It identifies and compares the cargo of the company with the commitment done by the shareholders. Here the ratio is 1.50 which is a result of a good scenario. It signifies less difference in the total liabilities and the shareholders equity. The debt capitalization ratio plays an important role in management the growth of the company. As it de livers an insight into the companys leverage, the asset turnover ratio