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CanGo Analysis
Financial Analysis of CanGo
CanGo does not appear to be especially efficient given the two efficiency measures appearing here. With both the Receivables Turnover and the Inventory Turnover, higher ratios indicate better efficiency -- the company is able to collect on accounts and turnover inventory faster (Spiceland et al., 2009). In the case of the former, CanGo's ratio of 1.56 is very low, suggesting that it takes almost two-thirds of a year to actually collect on accounts receivable, which would give the company far less cash flow from operations during the period than would be desirable (Helfert, 2001). Even if the company is making money, that is, it is collecting so slowly that it could still face problems (Bragg, 2007). The latter ratio demonstrates a problem in actually moving product, or perhaps in over-inventorying; if the company cannot boost sales to improve this ratio, it should...
This will have the effect of making borrowing cheaper, all else being equal, and depending on other factors is generally desirable (Helfert, 2001). The Current Ratio, which is a measure of liquidity rather than real financial leverage, is extremely high for CanGo and demonstrates that the company is highly liquid; this will also serve to cheapen debt and makes the company an attractive prospect for investors (equity holders and future equity holders), as well (Spceiland et al., 2009; Helfert, 2001; Bragg, 2007).
Two other liquidity ratios are also provided, and due…
References
Bragg, S. (2007). Financial Analysis: A Controller's Guide. New York: Wiley.
Helfert, E. (2001). Financial Analysis: Tools and Techniques. New York: McGraw Hill.
Spiceland, D., Sepe, J., Nelson, M. & Tomassini, L. (2009). Intermediate Accounting 5th Ed. New York: McGraw-Hill Irwin.
CanGo's financial condition can be measured by analyzing its financial statements, in particular by conducting a ratio analysis. The company is liquid. Its current ratio is very high at 5.39 and quick ratio likewise at 4.53. These figures are typical of a company that is in great financial condition. These figures are bloated, however, by the fact that much of the current assets are in the form of accounts receivable.
CanGo Case Analysis Six Key Issues Facing CanGo Effective organizational management requires going beyond managing the daily business operations. Organizational management requires paying attention to the financial and strategic side of the organization. However, strategy does not end with the mechanics of operating the business. Managers must attend to the "people" side of the organization as well. This firm has been hired as a business consultant to the CanGo company to explore
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In a context of a discount rate of 7% and a life project of ten years, cash flows of a negative $4,148,126 for the first year and then positive $3,441,981 for the remaining nine years, the net present value for the new automated storage and retrieval system is of $9,377,897.27. Additionally, the current value of the project cash flows is of $17,081,476.27, which is higher than the initial cost
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CanGo Management and Communication Problem Resolution Planning a Technological Solution Nick has been handed a project where he has to implement Online Gaming, requiring significant technological integration. What factors does he need to consider and manage for the project to be a success? As Warren tried to explain to Nick, the successful implementation of the project will require the purchase of hardware, the testing and selection of the right software, the securing of