Business Accounting Essay Example | Topics and Well Written Essays - 1000 words

Business Accounting - Essay Examplegenus genus Acer Group generated revenues of $14.74 billion in 2012 (Acer-group, 2012). Its revenues decreased by 9.62% in comparison with the previous year. The utter(a) profit of the fede proportionalityn was $1.48 billion and its gross margin equaled 10.04%. Gross margin is a measure of the extensive profitability of the corporation. Despite its solid broad profitability the company incurred in net losings for the year of $99.88 million. Its net losses for 2012 were discredit than the 2011 losses of $226.59 million. The net margin of the firm was -0.68%. Net margin measures the absolute profitability of a firm. The return on assets (ROA) of Acer Group was -0.04%. ROA indicates how profitable a firm is in relation to its assets (Investopedia, 2013). The return on assets of Acer Group was bad for two reasons. First the metric result was negative. A negative ROA is an undesirable outcome. The second reason is that it was below the computer ind ustry average ROA of 4.4% (Dun & Bradstreet, 2013). The return on equity (ROE) of the firm was -0.13%. Acer Groups return on equity is much lower than the industry average of 9.7%. The accredited dimension measures the ability of a company to pay off its short term debt (Accountingexplained, 2013). This ratio is compute dividing rate of flow assets by current liabilities. Acer Group had a current ratio of 1.19. Its current ratio is acceptable because is above the 1.0 threshold, but it is 1.01 below the industry average current ratio of 2.20. The quick ratio is another liquidity metric. It is calculated similarly than the current ratio with the exception that inventory is subtracted from current assets in the numerator of the formula. The quick ratio of Acer Group was 0.89 which is lower than the industry average of 1.50. The working capital of a condescension is calculated subtracting current liabilities from current assets. Acer Group had a working capital in 2012 of $954,888 ,000. This metric measures the ability of the company to pay off its short term debt using solely its current assets. The debt ratio measures how much a company relies on debt to finance its assets (Investorwords, 2013). It is calculated dividing number debt by total assets. Acer Group had a debt ratio in 2012 of 0.67. Considering its size the company is not too leveraged which allows the filling of using additional debt in the future to expand. The debt to equity ratio of the organization was 0.49. This ratio measures the amount of assets world provided by creditors for each dollar of assets being provided by stockholders (Garrison & Noreen, 2003). The debt to equity ratio of Acer Group is lower than the industry average of 0.82. Acer Group has depended less on debt than its competition. The inventory turnover of the company was 8.91. This implies that the company sold its inventory nearly nine times during the year. The average sale period of the firm was 40.95 days, thence it took the company less than 41 days to sell its entire inventory. The asset to sales ratio of the business was 52.77% which is slightly below the industry standard of 53.40%. The sale to working capital ratio of the firm was 15.43. This ratio is good considering the fact that the industry standard is only 3.50. The times interest make ratio measures the companys ability to make interest payments. Acer Group had a times interest earned ratio of 1.25. Task 2 The common stocks of Acer are trading in the market chthonian the symbol ACEIF. The stocks were priced at $3.02 as of December 25, 2013 (Yahoo, 2013).