Balance sheet and income statement commentary

Upon JB Hunt’s balance sheet to get 2011 email lists current assets of $513, 542, 500 and current liabilities of $438, 515, 000, containing a current proportion of 1. 17, which indicates the organization, has $1. 17 of current resources for every $1 of current liabilities. The prior year 2010, the current rate was zero. 91. This kind of shows a 29% embrace the current rate over the previous year. A company with a current ratio of two or higher is often viewed by lenders as a safe risk for short-term credit rating. Based on the 29% embrace current rate, JB Hunt is in an improved position to obtain short-term economic than it absolutely was in 2010.

Nevertheless , it is even now below the standard of 2 that lenders truly feel to be a secure risk. Within the economic conditions of the previous five years, lenders may take into consideration other factors such as comparing JB Hunt’s current proportion to that of other contending trucking businesses. JB Hunt’s quick ratio for 2011 is zero. 95 and for 2010 was 0. seventy. A quick rate or “acid-test measures cash, securities, and accounts receivables of a business in comparison to the current liabilities.

The quick rate is especially essential to companies that contain a history of challenges with converting products on hand into money quickly. This kind of difficulty can interfere with you can actually ability to shell out its immediate debt.

An easy ratio between 0. 60 and 1 . 0 is typically perceived as adequate, but with a shadow of potential cash-flow problems. JB Hunt’s quick ratio superior by 36% over the earlier year, which indicates the company, offers improved it is ability to meet its immediate obligations. JB Hunt’s personal debt to stockholders equity proportion for 2011 is 299% and 242% for 2010. This kind of ratio assess the level to which the business relies on obtained money because of its operations. A ratio above 100% signifies a business provides too much personal debt and not enough equity to repay the debt if perhaps they instantly needed to accomplish that. With a financial debt to equity ratio of 299%, JB Hunt provides a significantly higher level of debts when compared to its equity. Shareholders and loan providers would most likely view the organization to be too risky to either buy or to loan money to.

JB Hunt’s basic profits per share ratio pertaining to 2011 is 1 . 07 and 0. 79 for 2010. This percentage indicates the amount of profit the business enterprise earned for each share of outstanding common stock. The income per discuss ratio disclose earnings that potentially promote the growth of your company and provide funds, that can be distributed as being a dividend to stockholders. JB Hunt’s standard earnings per share increased by 35% over the earlier year, signifies the company has money to reinvest to ignite even more growth. JB Hunt’s return on product sales ratio intended for 2011 is usually 94% and 92% for 2010. This ratio indicates if the company is usually keeping speed with or exceeding their competitors in producing salary from sales and services.

JB Quest increased its sales rate by 2% over this past year. A 94% sales percentage is an extremely large number compared with the other 3 companies reviewed for this project. To determine how competitive this kind of ratio is by using the ratios of other trucking businesses would need additional research and evaluation of even more companies, which can be outside the range of this task. JB Hunt’s return on equity rate for 2011 is 45% and 35% for 2010. This kind of ratio analyzes risk by simply indicating simply how much a company attained for each dollar invested by simply shareholders. JB Hunt’s collateral ratio of 45% can be described as profitable percentage especially as investors look at a ratio more than 15% to become reasonable come back. In addition this ratio is an increase of 29% above the previous season.

UFP Systems (Plastics manufacturing)

The 2011 balance sheet pertaining to UFP Solutions lists current assets of $58, 040, 394, 500 and current liabilities of $9, 465, 304, 1000, yielding a present-day ratio of 6. 13, which indicates the organization, has $6. 13 of current property for every $1 of current liabilities. The previous year 2010, the current percentage was forty seven. 62. This kind of shows a significant increase in the existing ratio above the previous yr, which is because of assets bought in 2010 due to an buy. An organization which has a current ratio of 2 or higher is usually seen by loan providers to be a secure risk for initial credit. Based on a current proportion that is much more than 3 times precisely what is considered to be a safe risk, UFP Technologies feels like it will have no trouble obtaining initial credit if so required. UFP Technologies’ quick ratio for 2011 is 4. 80 and then for 2010 was 36. 12. This company has a outstanding quick ratio that may be 4 times precisely what is typically regarded as satisfactory.

Depending on this ration UFP Technology should have no issue with cash flow or with paying out its immediate debt. UFP Technologies’ debt to stockholders equity ratio for 2011 is 29% and 38% for 2010. This ratio indicates that the business has a low percentage of debt compared to its collateral and does not count on borrowed funds to run its operations. Buyers and lenders would almost certainly view the business to be a safe investment or possibly a safe company to lend money to on a immediate basis. UFP Technologies’ fundamental earnings per share rate for 2011 is zero. 77 and 0. 72 for 2010. The company’s basic revenue per share increased simply by 7% within the previous 12 months, which indicates the organization has some cash to reinvest for further progress. UFP Technologies’ return on sales ratio for 2011 and 2010 is 12%.

There was zero change in this ratio in the previous 12 months. This ratio indicates the company may not be keeping pace using its competitors in producing income from sales and companies. UFP Technologies’ return on equity proportion for 2011 is 17% and 18% for 2010. This ratio assesses risk simply by indicating simply how much a company attained for each dollar invested by simply shareholders. UFP Technologies’ value ratio of 17% is actually a profitable rate especially as investors consider a ratio above 15% to become reasonable returning. However , the ratio reduced by five. 5% over last which might be upsetting to shareholders whom are looking for an increase in this ratio year after year and never a decrease.

United Organic Foods, Inc. (Specialty meals stores)

Usa Natural Foods’ balance sheet pertaining to 2011 prospect lists current possessions of $8, 444, 492, 000 and current liabilities of $463, 421, 500, yielding a current ratio of 18. twenty-two, which indicates the company, has $18. 22 of current property for every $1 of current liabilities. The previous year 2010, the current percentage was 1 ) 37. This shows a 1, 229% increase in the current percentage over the past year. A business with a current ratio of 2 or higher is normally viewed simply by lenders as a safe exposure to possible short-term credit rating. With a current ratio of 18. twenty two United Organic Foods would certainly be view favorably simply by lenders if the need came about to seek initial credit. Combined Natural Foods’ quick ratio for 2011 is zero. 59 and then for 2010 was 0. forty-four. The speedy ratio is specially important to firms that have a history of difficulties with transforming inventory in to cash quickly. A quick proportion between zero. 50 and 1 . zero is typically perceived as satisfactory, good results . a shadow of potential cash-flow problems. Although a simple ration of 0. 59 is a noticable difference over this past year, this amount is still low and shows United Normal Foods may possibly experience monetary difficulty, which could interfere with the company’s ability to pay out its initial debt.

Combined Natural Foods’ debt to stockholders equity ratio intended for 2011 is definitely 61% and 98% for 2010. This rate evaluates the extent that the company relies on borrowed money for its procedures. A percentage over totally indicates a business has too much debt and not enough collateral to pay off your debt if they suddenly required to do that. Which has a debt to equity ratio of 61%, which is a loss of 37% over the previous yr, United Natural Foods features significantly reduced its habbit on took out money to finance its businesses. This makes the company more appealing to either shareholders or loan providers since the lowering of this ratio indicates the business is less of a risk than it was a year ago. United All-natural Foods’ basic earnings per share rate for 2011 is 0. 80 and 0. seventy nine for 2010. This ratio indicates the amount of earnings the business gained for each talk about of exceptional common share. The company’s basic earnings per share elevated by 1 . 2% within the previous 12 months, which indicates the company is relocating the right way toward increasing the earnings every share in order that it can reinvest in the company and grow the company later on.

This percentage is actually a good indicator of grow with the state in the economy over the past 5 years. United Natural Foods’ return on sales ratio to get 2011 and 2010 is 3%. This ratio signifies the company is definitely maintaining its condition and produced the same amount of income coming from sales and services this season that it performed last year. This can be due to the unpredictable economic conditions preventing new customers from buying at United Natural Foods because they have to find approach to cut costs. United Natural Foods’ come back on equity ratio to get 2011 is 9% and 11% for 2010. This percentage assesses risk by indicating how much a company earned for each dollar used by shareholders. United Normal Food’s equity ratio intended for 2011 decreased by of 2%, a disappointing number for shareholders. Investors think about a ratio above 15% to be a reasonable returning.

Wells Fargo (Mortgage Company)

Wells Fargo’s balance sheet pertaining to 2011 email lists current assets of $1, 313, 867 million dollars and current liabilities of $920, 070 million dollars, yielding a present-day ratio of just one. 43, signifies the company, offers $1. 43 of current assets for each $1 of current liabilities. The previous season 2010, the present ratio was 1 . forty eight. This displays a several. 4% decrease in the current proportion over the past year. A business with a current ratio of 2 or higher is often viewed by lenders to be a safe exposure to possible short-term credit rating. Based on the latest ratio, Water wells Fargo is known as a risky organization for any lender. Under the financial circumstances with the past five years, loan providers may take into mind other factors including comparing Water wells Fargo’s current ratio to that particular of different competing corporations. Wells Fargo’s quick ratio for 2011 is 0. 07 was 0. eleven. A quick rate or “acid-test measures cash, securities, and accounts receivables of a business in comparison to its current debts. A quick proportion between zero. 50 and 1 . zero is typically perceived as satisfactory, good results . a darkness of potential cash-flow problems. Wells Fargo’s quick rate is 0. 43 factors below the bare minimum level of adequate.

This company can be severely in danger of not being able to convert products on hand into money quickly and may even end up defaulting on its short-term debt. This is a risky organization for traders and lenders. Wells Fargo’s debt to stockholders equity ratio intended for 2011 can be 827% and 884% for 2010. This ratio evaluates the extent that the company depends on borrowed cash for its businesses. A ratio over fully indicates a company has too much debt rather than enough value to pay off your debt if that they suddenly necessary to do that. Using a debt to equity proportion of 827%, Wells Fargo has an substantial level of financial debt when compared to it is equity. Shareholders and lenders obviously look at this company like a business to prevent. Wells Fargo’s basic profits per share ratio pertaining to 2011 can be 1 . 50 and 1 ) 18 in 2010. This ratio indicates the quantity of profit the business enterprise earned for every share of outstanding prevalent stock.

The earnings per discuss ratio expose earnings that may potentially promote the growth of the company and offer funds, that can be distributed being a dividend to stockholders. Bore holes Fargo’s basic earnings per share improved by 27% over the previous year, which indicates the company may well have some money to reinvest back into the corporation for development. Wells Fargo’s return in sales ratio for 2011 is 48% and 36% for 2010. This kind of ratio shows if the business is keeping pace with or going above its competition in creating income via sales and services.

Wells Fargo elevated its product sales ratio simply by 12% over last year. A 48% return on product sales ratio is actually a high number. This kind of ration shows that the company is making strides to become competitive again. Wells Fargo’s return upon equity proportion for 2011 is 11% and 10% for 2010. This ratio analyzes risk by simply indicating simply how much a company gained for each dollars invested by shareholders. Traders consider a ratio over 15% to be a sensible return. A ratio of 11% is disappointing to investors. Yet , it is a moderate improvement in the previous 12 months. So the firm may be focusing on pulling on its own back up and learning how to turn into profitable and attractive to loan providers and investors once again.

Referrals

Raibom, C. A. (2010). Core Principles of Accounting (2nd impotence. ).: John Wiley & Sons Inc.. Annual Reviews, http://www.sec.gov, date retrieved 06/28/2012

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