How has good morning Textile performed everywhere the past four years? Be prepared to allow financial ratios that present a clear picture of Auroras financial condition.
Exhibit 1 shows Income statement of Aurora Textile Company for the fiscal years 1999-2000. As mentioned in the introduction, Aurora had remained main efficient plants by reducing inefficient operations, but its sales show downward trend and in 2002, it decreased about 40% to compare performance in 1999. Due to the fact that Asian and some other foreign textile manufacturers have been exported aggressively and consumer preferences are requiring higher-quality products with minimum defects, like other firms, Aurora tends to produce small amount of yarns produced with minimal breaker point and provide to customized markets. Consequently, Aurora had decreased significantly its costs by reducing $3.
9 million of SG&A expenses since 2000 and it was one reason of increase operating profit and net earnings in 2002. Unfortunately, Auroras pay backed amount from retailers had been increased and the proportion of sales return of Auroras one plant named the Hunter reached 1.5% in 2002; thus, the firms income has not risen well.
Figure 1 illustrates Auroras financial ratios by calculating prone financial information through Exhibits 1, 2, and 6. The first, the companys runniness ratios-current ratio and quick ratio-had been increased smoothly for these four years. For shareholders, increase current ratio shows that the company might be retentiveness significant amount of money for inefficient assets. Due to...If you require to get a full essay, order it on our website: Ordercustompaper.com
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