Numerical Problem Speech or Presentation Example | Topics and Well Written Essays - 250 words

Numerical Problem - Speech or Presentation Example Further, the firm has a higher debt-to-equity ratio which is also unfavorable indicating more risk because the firm depends more on external lenders. Average collection period indicates the number of days a firm requires converting its receivables into cash. The firm takes more days that the industry average implying that the premiums receivable of the firm are less liquid or are converted less quickly into cash. The firm is, therefore, less efficient in managing its premium receivables compared to the industry average. Days cash on hand shows the number of days of operating expenses that the firm could meet with its current cash available. The company is in a worse situation because it has a lower ratio than the industry average and should increase its fundraising or cut back its spending. Return on assets is a profitability ratio measuring how efficient a firm is in using its assets to generate revenue. The firm has a higher ratio than the industry average implying that it is more efficient in using its assets to generate revenue than the industry average. The firm has higher TIE ratio than the industry average. It, therefore, has higher ability to meet its interest payments on the debt. The firm has a lower fixed asset turnover ratio meaning it is not using the assets optimally. It is less efficient than the industry average in using assets to generate sales or