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7% last year.
Calculations: At 176 days, this turnover is far too slow. The combination of narrow margins and high A/R turnover in day means that the company could find itself subject to cash crunches from time to time. It should be noted, however, that 176 days is a substantial improvement over the previous year.
2001
2000
LTD/Assets
$1,243,522 / $2,280,086
$1,201,590 / $2,213,837
Total Asset Turnover
$799,554 / $2,280,086
$625,787 / $2,213,837
Net Assets / Total Assets
$779,841 / $2,280,086
$756,174 / $2,213,837
Overall, the financial health of Hopeful Happy Health Care Systems (HHHCS) is adequate. The biggest area of concern is with respect to profitability, as the company has very low operating margins. In 2000, the company barely turned a profit, and although 2001 represented an improvement, that improvement was somewhat limited, and the ROA was still below 1%. It is expected that a firm with health profits is able to generate a much higher ROA.
Most of the other ratios held more or less flat. This indicates that the company's operations are fairly static, so limited changes can be expected in the future. HHHCS has made improvements in the areas where it needed to, which is encouraging. In future, the company should focus on improving its operating margins, as this would have a positive impact on a number of other key ratios as well. The firm has a healthy level of debt, but should hold…
Overall, the financial health of Hopeful Happy Health Care Systems (HHHCS) is adequate. The biggest area of concern is with respect to profitability, as the company has very low operating margins. In 2000, the company barely turned a profit, and although 2001 represented an improvement, that improvement was somewhat limited, and the ROA was still below 1%. It is expected that a firm with health profits is able to generate a much higher ROA.
The most alarming of other figures is the accounts receivable turnover. At 176 days, this turnover is far too slow. The combination of narrow margins and high A/R turnover in day means that the company could find itself subject to cash crunches from time to time. It should be noted, however, that 176 days is a substantial improvement over the previous year.
Most of the other ratios held more or less flat. This indicates that the company's operations are fairly static, so limited changes can be expected in the future. HHHCS has made improvements in the areas where it needed to, which is encouraging. In future, the company should focus on improving its operating margins, as this would have a positive impact on a number of other key ratios as well. The firm has a healthy level of debt, but should hold the line on taking on new debt until there is evidence of significant revenue expansion.
This also justifies the large value of inventory previously pointed out when the current ratio was calculated. The debt to assets ratio will show the leverage of the company and evaluate the financial risk at Wal-Mart. In 2007, the debt to assets ratio at Wal-Mart was 0.216. The financial leverage used by the company is quite small, but the explanation for this resides not necessarily in the small value of
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