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Capstone Simulation

Finacial Analysis According to the rehearsal round of the Capstone Courier financial statistic, my company (Andrew) performed better comparing to the other two companies. As profit is one of the main performance measures, my company’s yearly profit came out to be $12, 5389,134. Baldwin and Chester profited $9,981,809 and $12, 000, 2333 which places my company a head when it comes to profit. The following are more ratios to illustrate my company’s performance, * ROA- 10. 9% comparing to 8. 4% and 10. 9% of the competitors, this indicates that my company is relatively more efficient using the assets to generate earnings. ROE- 19. 4% comparing to 16. 4% and 19. 7% of the competitors, this shows that my company had a fair amount of profit generated with the money shareholders have invested ranking slightly under Chester Company. * The company’s contribution margin which measures my product’s gross operating margin is 29. 7% which places my company right in between the two companies, for further improvement I will have to revise each product’s profitability and reduce my production on the product with less profitability which will help me improve my contribution margin.

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The above ratios are some of the ratio used to measure my company’s performance. Aside the lists above, my company also has a higher ROS which gives me an insight of how much profit is being produced per dollar of sales from both companies. See attached sheet for ratios, free cash flows, internal growth rate and sustainability growth. The Free cash flow (FCF) shows the cash that my company is able to generate after laying out the money required maintaining or expanding its asset base. The internal growth basically identifies the highest level of growth achievable for my company without obtaining outside financing.

The rate for my company is 40. 35%, which is a better growth than both the companies with rates 35. 89% and 35. 53%. Working capital measures the liquidity of my company’s asset , my calculated working capital is $64,712 which is obtained by subtracting my current liability from my current asset which informs me that my company is healthy financially specially comparing to the other two companies that has a calculated working capital of $60,865 and $60,881. | Andrew| Baldwin| Chester| Leverage Ratios:|  |  |  | Debit Ratio| 0. 39| 0. 37| 0. 36|

Debit Equity Ratio| 0. 64| 0. 59| 0. 56| Times-Interest Earned| 6. 03| 4. 84| 5. 50| Liquidity Ratio|  |  |  | Net-Working Capital| 0. 03| 0. 28| 0. 23| Current Ratio| 0. 93| 0. 79| 0. 81| Quick Ratio| 0. 79| 0. 73| 0. 77| Cash Ratio| 0. 54| 0. 51| 0. 53| Efficiency Ratio|  |  |  | Sales-to-Assets| 1. 30| 1. 22| 1. 31| Sales-to Networking Capital| 2. 37| 2. 14| 2. 26| Days in inventory | 11. 28| 10. 50| 10. 70| Average Collection| 34. 58| 36. 45| 32. 33| Receivables turnover| 12. 17| 11. 73| 11. 98| Profitability Ratio|  |  |  | Net Profit Margin| 12. %| 11. 2%| 12. 2%| ROA| 1. 30| 1. 07| 1. 46| ROE| 1. 80| 1. 90| 2. 00| Payout Ratio| 0. 45| 0. 51| 0. 46| Market Value Ratio|  |  |  | Price earnings ratio (P/E)| 9. 80| 11. 30| 10. 10| Dividend Yield| 2. 10| 1. 10| 2. 70| Market to book Ratio| 2. 02| 1. 86| 1. 99| | Andrew| Baldwin| Chester| Plowback Ratio| 0. 37| 0. 27| 0. 23| Return on Equity| 1. 80| 1. 90| 2. 00| Sustainable growth rate| 20. 56%| 14. 21%| 11. 50%| | Andrew| Baldwin| Chester| Net Income | $ 12,539. 00 | $ 9,982. 00 | $ 12,000. 0 | Amortizations/Depreciation | $ 7,587. 00 | $ 7,933. 00 | $ 7,493. 00 | Change in Working Capital | $ 64,712. 00 | $ 60,865. 00 | $ 60,881. 00 | Capital Expenditures | $ 1,452. 00 | $ 2,354. 00 | $ 1,766. 00 | Free Cash Flow | 46,038. 00| 45,304. 00| 43,154. 00| | Andrew| Baldwin| Chester| Plowback Ratio| 0. 37| 0. 27| 0. 23| Return on Equity| 1. 80| 1. 90| 2. 00| Sustainable growth rate| 20. 56%| 14. 21%| 11. 50%|

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