Purchase Solution

organizations increasing sales

Not what you're looking for?

Ask Custom Question

Discussion Question One Week Two
Who uses financial ratio analysis information? How can you determine if an organization is paying its bills? How can you determine if an organization is using too much debt? How can you compare an organization to its competitors? How can organizations with increasing sales run into difficulties?
Who uses financial ratio analysis information?
In financial analysis, we need qualitative information and try to read between the numbers. Ratio analysis can also help us to check whether a business is doing better this year than it was last year; and it can tell us if our business is doing better or worse than other businesses doing and selling the same things. Many different users have need for accounting information in order to make important decisions. These users include investors, creditors, management, governmental agencies, labor unions, bankers, customers, suppliers and others.
How can you determine if an organization will be unable to pay its bills?
Liquidity ratios measure the ability of a firm to satisfy obligations due in the near future, usually within the next year. The two most popular liquidity or working capital ratios are the current ratio and the acid test (quick) ratio:
• The Current Ratio = Current Liabilities / Current Assets
• Quick (Acid Test) Ratio = Current Assets - Inventories / Current Assets
Thus One has to see the current ratio to identify the liquidity position of the organization. If the current ratio is low (less than 1:1) or negative than the organization may not be able to pay its bill.
How can you determine if an organization is using too much debt?
The debt management ratios, measures the company's ability to meet its long-term obligations as they become due. Thus one can use the Debt equity ratio= Debt/equity. If this ratio is high than one can say that organization is using too much debt.
How can organizations with increasing sales run into difficulties?

Attachments
Purchase this Solution
Solution Summary

How organizations with increasing sales run into difficulties are analyzed.

Solution Preview

It can run into difficulties if it doesn't have sufficient funds in order to manage the growing operations due to growth in sales. This is because Increasing sales will require more ...

Purchase this Solution
Free BrainMass Quizzes
MS Word 2010-Tricky Features

These questions are based on features of the previous word versions that were easy to figure out, but now seem more hidden to me.

Paradigms and Frameworks of Management Research

This quiz evaluates your understanding of the paradigm-based and epistimological frameworks of research. It is intended for advanced students.

Business Processes

This quiz is intended to help business students better understand business processes, including those related to manufacturing and marketing. The questions focus on terms used to describe business processes and marketing activities.

Balance Sheet

The Fundamental Classified Balance Sheet. What to know to make it easy.

Transformational Leadership

This quiz covers the topic of transformational leadership. Specifically, this quiz covers the theories proposed by James MacGregor Burns and Bernard Bass. Students familiar with transformational leadership should easily be able to answer the questions detailed below.

View More Free Quizzes
Related BrainMass Solutions

  • Ratios and Organizations

    108174 Ratios and Organizations How can you compare an organization to its competitors? How can organizations with increasing sales run into financial difficulties? Which ratios might help find this situation?

  • Supply Chain Management's Role

    Improving the supply chain can also promote strong relationships with the organization's suppliers and customers by fulfilling orders in a timely manner which also can attract more customers increasing product output and sales.

  • Women Participation in the Work Force

    Causes and consequences of the increasing numbers of women in the workforce. Forbes. Retrieved from http://www.forbes.com/sites/lisaquast/2011/02/14/causes-and-consequences-of-the-increasing-numbers-of-women-in-the-workforce/ Sweazy,A.,(2014).

  • Why do managers put emphasis on controlling fixed costs?

    Once the contribution margin is large enough to cover the fixed costs, all sales after that result in profits increasing by the contribution margin. Your discussion is 201 words and includes an illustration of operating leverage in Excel.

  • Training and Developing Sales Forces

    Sales personnel that can adapt their strategies to ever-changing environmental conditions have the greatest probability of being able to continue to produce steadily increasing sales of goods and services to consumers.

  • Sales forecast

    For example, if a company is making increasing sales because of some inherent advantage, then the sales/ marketing group may want to give an optimistic forecast about the market, even thought the reality might be that there was a falling demand in the

  • Baderman Island E-Commerce Money Movement

    The browsing of the product should also be simple as it plays a great role in increasing the sales of the business. An increase in the product visibility and site functionality would be beneficial to increase the sales of the organization.

  • Environmental analyses for the organic foods industry - U.S. sales of organic foods and beverages

    There is increasing demand for organic products due to consumer awareness and also farmland used for production is increasing at a high rate.

  • Sales Promotion and Advertising, Brand Value, Sender-Recievr

    Also, it discusses if brand value always increases with increasing sales of the product, and how discounts affect the sales and brand value.

View More Related Solutions