Ca 1 - Principles Of Accounting

: As the new chieftain Executive Officer of OHC aesculapian Center , I would elicit to father use of the pecuniary information of the validation to value the monetary health of OHC and astonish hold of important stipulationinations regarding current and hereafter operations of OHC . Since the present pecuniary information for 2006 and 2007 of the organizations is a reflectiveness of what happened in the past , I must use the alike to guide the phoner to be attain its objectives especially on the fiscal aspectTo the do the kindred I will fix to evaluate first the advantageousness , liquidity and then solvency of the organization using following financial ratios as extracted from the party s financial statements 2006 2007 Net Income 37 ,370 ,000 34 ,177 ,000 16 ,718 ,000Net Profit beach 0 .64 0 .69Return on Assets 0 .84 0 .69Return on Equity 11 .58 2 .04Current Ratio 1 .51 2 .11Debt to Equity Ratio 12 .77 1 .95 Profitability tells whether the ships company is earning well in equilibrium with expectations and objectives . The medical center appears to be really profitable at the net profit margins of 0 .64 and 0 .69 for the days 2006 and 2007 on an individual derriere . This fashion that the company is earning much than half of its revenues which if expressed in unproblematic terms could mean that for both ten-dollar revenue , the company is earning 64 cents and 69 cents for the long time 2006 and 2007 respective(prenominal)ly , which ar precise high . No wonder the retrieve on assets reflected 0 .84 and 0 .69 for the years 2006 and 2007 respectively . The same rumination is more(prenominal) evident in the very high return on justness which was reflected at 11 .58 and 2 .04 for the years 2006 and 2007 respective .

In realistic terms , investors earn more than eleven times from their 2006 investiture while more than geminate in 2007The very perspicuous positivity is also self-evident in its meet on company s liquidity which was reflected at 1 .51 and 2 .11 for the years 2006 and 2007 respectively . Since liquidity (Helfert , 1994 ) measures the susceptibility of the company to meets its currently maturing obligations it goes without state creditors need not bear on since they have a very low risk in extending credit to the companyThe good impact of the company s profitability (Brigham and Houston ,2002 ) is supercharge reflected in the company s solvency (Meigs and Meigs , 1995 ) which speaks for the want-term health of the organization A debt to candor ratio of 12 .77 in 2006 which indicateificantly improved to 1 .97 in 2007 could only generate a proven soldiery capability and stability of the organizationOn the basis of the company s proven profitability , it whitethorn be reason out that the company is delivering the expectation of owners and managers and separate decision makers are judge . An earning company is a sign of sanitary one that could control the company of its short term and long term...If you want to get a full essay, array it on our website: Ordercustompaper.com

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