scroll to top
Stuck on your essay?
Get ideas from this essay and see how your work stacks up
Word Count: 296
LA Gears ROE has decreased over the last three years from 4945 in 1988 to 1522 in 1990 Profitability NISales has also fallen dramatically from 98 in 1988 to 347 in 1990 Asset turnover has increased from 169 to 248 because while sales have quadrupled total assets have only increased by about 27 timesThe gross profit margin has dropped from 4229 in 1988 to 3441 in 1990 LA Gears operating profit margin has decreased from 1852 to 775 This is due to a dramatic increase in operating expenses The decreasing net profit margins 985 to 347 is due to lower gross profit margins and expenses Net profit margin gross profit margin and operating profit margin are all below industry standards La Gears total asset turnover has increased from 169 to 248 due to the fact that sales has increased at a faster rate than inventory levels have Inventory turnover has also increased from 194 to 368 although it is still below industry standards Slow inventory turnover may be due to out of date inventory Average collection period decreased from 1988 to 1989 but then went up slightly in 1990LA Gear has not been able to improve its ROE even thought it improved its asset efficiency its profitability and leverage have decreased Assets to equity have decreased from 1988 but is still above the average This increase in debt has led to an increase of inventory Times interest earned has dropped from 1010 to 377 which is way below industry standardsLA Gears short-term liquidity current ratio has increased but is still below standards This is due to an increase in current assets such as inventory and receivablesLA Gear might be able to increase inventory turnover by relaxing credit terms and accepting a higher collection period Getting rid of old merchandise could also help bring the inventory turnover up to industry standards Cutting operating expenses would increase their profit marginsBibliographyjunj
@Kibin is a lifesaver for my essay right now!!
- Sandra Slivka, student @ UC Berkeley
Wow, this is the best essay help I've ever received!
- Camvu Pham, student @ U of M
If I'd known about @Kibin in college, I would have gotten much more sleep
- Jen Soust, alumni @ UCLA