Cartwright timberland federation- Memorandum
I would suggest Cartwright timberland Company not to take any more loans from Northrop Bank. As I analyzed financial ration of Cartwright Lumber Company, their performances from 2001 to 2004 pretend been gone down rapidly. The Leverage ratio have shown that Cartwright Lumber Company already have three-times of debts compared to equity. It means that if Cartwright Lumber Company cannot interest to creditors it would cause going to bankruptcy.
I would recommend that financial support by issuing stocks. Dividends to shareholders are not mandatory. But gainful interest to creditors is mandatory. Therefore, company could control cash balance to indue to purchase equipment.
1. Profitability| 2001| 2002| 2003| 2004 premiere Quarter|
ROA| 5.2%| 4.6%| 4.7%| 0.8%|
ROE| 11.5%| 11.2%| 12.6%| 2.5%|
 |  |  |  |  |
2.Liquidity| 2001| 2002| 2003| 2004 number one Quarter|
Current balance| 1.8| 1.6| 1.5| 1.4|
Acid Ratio| 0.9| 0.7| 0.7| 0.5|
 |  |  |  |  |
3.Efficiency| 2001| 2002| 2003| 2004 First Quarter|
Asset disturbance| 2.9| 0.
8| 0.8| 0.2|
A/R Turnover| 9.9| 2.6| 2.5| 0.5|
A/R collection period| 37| 143| 146| 673|
scrutinise Turnover| 5.1| 1.3| 1.3| 0.3|
Inventory Turnover Period| 71.4| 287.0| 278.5| 1362.1|
Operating bike| 108.2| 429.5| 424.6| 2035.2|
Fixed Asset Turnover| 13.5| 3.8| 4.5| 1.1|
 |  |  |  |  |
4.Leverage| 2001| 2002| 2003| 2004 First Quarter|
Debt Ratio| 98.3%| 109.6%| 120.0%| 126.1%|
Debt-to- Equity Ratio| 216.3%| 265.5%| 321.8%| 386.6%|
Time-Interest-Earned Ratio| 3.8| 3.1| 2.6| 2.1|If you want to get a full essay, order it on our website: Orderessay
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