| Raul Burgueno |
| BUS 015b |
| Prof. Dr. Burkitt |
| SOLVENCY MEASURE | | | | | METHOD OF COMPUTATION | | | | | | | ANSWER 2015 | | Industry average |
| Liquidity ratios |
| WORKING CAPITAL | | | | | CURENT ASSETS – CURRENT LIABILITIES | | | | | $9,683–$5,312 | | | $ 4,371.00 |
| CURRENT RATIO | | | | | CURRENT ASSETS/CURRENT LIABILITIES | | | | | $9,683/$5,312 | | | 1.8 | | 0.52 |
| QUICK RATIO | | | | | QUICK ASSETS | | | | | ($9683-$522-$330) | | $ 8,831.00 |
| | | | | | CURRENT LIABILITIES | | | | | $ 5,312.00 | | $ 5,312.00 | 1.7 | | 1.7 |
| analysis |
| Fedex corporation has a current ratio of 1.8 and quick ratio of 1.7 indicating that it has enough current assets to cover its current obligations. This means that FedEx corporation has no liquidity problems. Fedex's current ratio is above average the industry ratio, but quick ratio is equal to the market ratio. this means that the company liquidity is better than its competitors. |
| Activity ratios |
| ACCOUNT RECEIVABLE TURNOVER | | | | | NET SALES | | | | | $45,567 | | $45,567 |
| | | | | | AVERAGE ACCOUNT RECEIVABLE | | | | | ($5460+$5044)/2 | | $ 5,252.00 | 8.7 | | 8.74 |
| NUMBER OF DAYS SALES IN RECEIVABLES | | | | | AVERAGE ACCOUNT RECEIVABLE | | | | | ($5460+$5044)/2 | | $ 5,252.00 |
| | | | | | AVERAGE DAILY SALES | | | | | ($45567/365) | | $ 124.84 | 42.1 |
| INVENTORY TURNOVER | TURNOVER | | | | COST OF GOODS SOLD | | | | | ($16555+$8011+$2622) | | $ 27,188.00 |
| | | | | | AVERAGE INVENTORY | | | | | ($463+$457)/2 | | $ 460.00 | 59 | | 72 |
| NUMBER OF DAYS SALES IN INVENTORY | | | | | AVERAGE INVENTORY | | | | | ($463+$457)/2 | | $ 460.00 |
| | | | | | AVERAGE DAILY COST OF GOODS SOLD | | | | | $27188/365 | | $ 74.49 | 6.2 |
| analysis |
| The company has account receivables tunover of 8.7, number of days sales in receivable of 42.1, inventory turnover of 59 and number of days sales in inventory of 6.2 indicating that the company is fairly efficient. This is evidenced by higher market account receivable turnover of8.74 and inventory turnover of 72. this means that its competitors are doing business more efficiently than FedEx hence facing stiff competition. |
| Financial leverage |
| RATIO OF LONG TERM LIABILITIES TO FIXED ASSET | | | | | LONG TERM LIABILITIES | | | | | $12,481 | | $12,481 |
| | | | | | fixed assets | | | | | $19,550 | | $ 19,550.00 | 0.6 | | 2.4 |
| RATIO OF LIABILITIES TO STOCKHOLDER'S EQUITY | | | | | TOTAL LIABILITIES | | | | | ($5312+$4736+$7745) | | $ 17,793.00 |
| | | | | | TOTAL STOCKHOLDER'S EQUITY | | | | | 15277.00 | | $ 15,277.00 | 1.2 | | 1.54 |
| NUMBER OF TIMES INTEREST CHARGES ARE EARNED | | | | | INCOME TAX+INTEREST EXPENSE | | | | | $1192+$160 | | $ 1,352.00 |
| | | | | | INTEREST EXPENSE | | | | | $ 160.00 | | $ 160.00 | 8.5 |
| analysis |
| FedEx corporation has long term liabilities to fixed asset of 0.6, liabilities to equity ratio of 1.2 and times interest coverage of 8.5 indicating that, its more financed by equity hence its less levered compared to its competitors as industry long term liability to fixed asset is 2.4 and liabilities to equity ratio of 1.54 which is more than the companys ratio. |
| Returns ratio |
| RATIO OF NET SALES TO ASSETS | | | | | NET SALES | | | | | 45567.00 | | $45,567 |
| | | | | | AVERAGE TOTAL ASSETS - LONG TERM INVESTMENTS | | | | | ($33070+$33567)/2-$15277 | | 18,041.50 | 2.50 |
| RATE EARNED ON TOTAL ASSETS | | | | | NET INCOME+INTEREST EXPENSE | | | | | $2097+$160 | | $ 2,257.00 |
| | | | | | AVERAGE TOTAL ASSETS | | | | | ($33070+$33567)/2 | | 33318.50 | 0.1 |
| RATE EARNED ON STOCKHOLDER'S EQUITY | | | | | NET INCOME | | | | | $ 2,097.00 | | $ 2,097.00 |
| | | | | | AVERAGE TOTAL STOCKHOLDER'S EQUITY | | | | | ($15277+$17398)/2 | | $ 16,337.50 | $ 0.13 | | 0.17 |
| RATE EARNED ON COMMON STOCKHOLDER'S EQUITY | | | | | NET INCOME-PREFERRED DIVIDENDS | | | | | $2097-$179.216 | | $ 1,917.78 |
| | | | | | AVERAGE COMMON STOCKHOLDER'S EQUITY | | | | | ($32+$32)/2 | | $32 | 59.9 |
| analysis |
| Fedex has net sales to assets of 2.5,return on assets of 0.1 and return on equity of 0.13.this indicates the percentage return on each dollar invested. The company is less profitable compared to its competitors as the company return on equity ratio is 0.17 above that of company. |
| Shareholders ratio |
| EARNINGS PER SHARE ON COMMON STOCK | | | | | NET INCOME-PREFERRED DIVIDENDS | | | | | $2097-179.216 | | $1,918 |
| | | | | | SHARES OF COMMON STOCK OUTSTANDING | | | | | 318-36.8 | | 281.2 | $6.82 |
| PRICE EARNING RATIO | | | | | MARKET PRICE PER SHARE OF COMMON STOCK | | | | | $6.82 |
| | | | | | EARNINGS PER SHARE OF COMMON STOCK | | | | | $6.82 | | | 1 |
| DIVIDEND PER SHARE | | | | | DIVIDENDS ON COMMON STOCK | | | | | $187 | | $187 |
| | | | | | SHARES OF COMMON STOCK OUTSTANDING | | | | | 318-36.8 | | 281.2 | $0.67 |
| DIVIDEND YIELD | | | | | DIVIDENDS PER SHARE OF COMMON STOCK | | | | | $1 |
| | | | | | MARKET PRICE PER SHARE OF COMMON STOCK | | | | | $6.82 | | | 0.15 |
| analysis |
| Fedex earning per share is 6.82, price earning is 1, dividend per share is 0.67 and dividend yield is 0.15. this indicates that the company is utilizing the common stock efficiently and its likely to attract more investors. It also indicates that more of its profit is reinvested hence low dividend per share compared to earnings per share. |
adrian77
fedex_ratios-2.xlsx
