Chem-Med Company Ratio Analysis
Solution Case # 02:
Question # 1:
Sales
10466
Sales Growth
Sales growth for the year 2006 is 25% where as the sales growth projected for the year 2007, 2008 and 2009 is 40%.
Question # 02:
Income
Income Growth
50.13%
39.91%
20.76%
49.41%
Income growth in the year 2006 was 50.13% which is higher than the growth of sales in 2006 whereas, the income growth in years 2007, 2008 and 2009 is 39.91%, 20.76% and 49.41% respectively. In 2007 the income is growing at the same rate as that of sales, in 2008 the income is growing at lower rate than sales whereas the income in 2009 is growing at faster rate than the sales in 2009. In 2007 income statement 500 is expense as extraordinary expense so this should be treated below the line and should not be deducted from the income from continuing operation.
Question # 03:
Current Assets
Current Liabilities
Current Ratio Chem-Med
Median Company
Pharmacia Current Ratio
Industry Average
Chem-Meds current ratio is higher than that of Pharmacia in 2006. Companys current ratio is still higher than the industry average and the companys current ratio is in safe zone. In 2009 the company current ratio is still positive but its lower than the safe zone as mentioned as 2.25 to be adequately safe. So the companys current ratio in 2009 is 1.98.
Question # 04:
614
857
1,212
1,664
Asset
4,491
6,343
8,641
11,995
Debt