Premier Furniture

Summary There are several external and internal factors that contributed to the changes in overall financial health for Wolcott Department Stores and Designers, Inc, two credit entry risks to necropsy Furniture. Both companies credit situations suffered from a downward incline in the market and a national rise in interest rates. To combat this, they were forced to reduce prices, lowering their kale margins. This action temporarily led to a decrease in demand as tramps for shipments fell at least 10%. Wolcotts ratios are most likely affected by their new store openings. Analysis For Designers, Inc., there was in increase in their liquidity, shown by the current and quick ratios of demonstrate 1, but this was nonpareil of the only substantiative changes to their guilds financial situation. with child(p) increases in the age Inventory Held, the Average assembling Period, and the Days Payable Outstanding ratios imply great credit risks. This represents inefficiency in their abilities to move assets and collect payments. The negative ratios for Net Profit Margin, fall in on Equity, and Return on Assets signify negative positivity and losses.

Adversely, Walcott saw only small increases in their Average Collection Period and Days Payable Outstanding ratios and actually reduced the number of days inventory is held, as seen in Exhibit 2. Similarly, Walcott saw decreases to their profitability but managed to keep their numbers positive for ROA, ROE, and Total Asset Turnover. Recommendations My calculations suggest that Designers, Inc. is a much riskier investment. necropsy should consider tightening their credit limits or dropping the company all together. As for Walcott, I would suggest that Premier reassess the ratios each quarter to monitor the effects of the new stores. Also, Premier needs to better communicate and align the goals of their credit bus and sales manager. If you want to get a full essay, order it on our website: Orderessay

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