Calculate the compound average annual growth rate in sales and profit after tax for Triple A

Calculate the compound average annual growth rate in sales and profit after tax for Triple A

Case
Questions1.Calculate the compound average annual growth rate in sales andprofit after tax for Triple A.
2.What are Triple A’s earnings per share and dividends per share foreach year shown in Tables 1 and 2?3.Calculate some financial ratios for the company for the last threeyears shown. (Include profit margin, receivables collection period,current ratio, quick ratio, inventory turnover.) What has been thecompound growth in inventory, and total current assets?
4.Comment on the trend of the financial ratios.
5.Is Triple A a good short-term borrowing client for the bank?
6.If the typical firm in which Triple A operates has a debt ratio of 52percent, and a compound annual growth in gross profits of 8 percent,what advice would give Triple A concerning its debt ratio?
7.If the company’s compound sales growth slowed to half of its presentrate, what would be the likely effect upon external financing needs?What is the desired effect upon inventory if such a change occurs?8.For a company such as Triple A, comment on the importance ofinventory control and accounts receivable collection policy.
9.Why is there a difference between the company’s sales growth andits profit growth? Specifically, how is the difference likely to influenceborrowing needs? To what is the difference due? How should TripleA address this difference? Comment upon the firm’s payout ratiorelative to its sales growth. Is this appropriate? Why or why not?
10.Based upon the information provided in the case and upon your ratioanalysis only, will the bank likely recommend more long-termborrowing for the firm or provide short-term funding?


 

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