Spartech Corporation a Financial Ratio Analysis Essays

Spartech Corporation is a leading producer of extruded thermoplastic sheet and rollstock, polymeric compounds, and custom engineered plastic products. Their annual production capacity amounts to more than 1.7 billion pounds produced in manufacturing facilities located throughout the United States, Canada, Mexico and Europe. The companys financial ratios for 2004, 2005, and 2006 were analyzed and indicates that the company is not without problems. The current ratio for the company has been on a steady decline over the last three years. From the standpoint of a creditor, the reduction of the companys current ratio is not good as the companys short term liabilities is outgrowing its current assets. However, when you look at the†¦show more content†¦If it is giving them net 30 days, it needs improvement; however, based on the last three years, the receivable turnover is showing signs of improvement which is good for the companys cash flow. The companys Sales to Total Assets have also shown improvement over the last three years. This indicates the company has been able to use its existing assets efficiently to generate greater sales for the company. A review of the companys balance sheets indicates total assets have shrunk over the last three years while the companys sales have improved over the last three years. As an investor, this is a good sign, however, it could mean the company has reached its capacity output level and may need to raise cash to support future growth. The Total Debt to Total Asset ratio figure for the company has show a downward trend over the last three years. Both the assets and the liabilities of the company has declined, however, the decline in the companys liabilities have declined faster then their assets. From an investor standpoint, this is good as the company is now able to take on additional debt to help support growth. This additional debt, however, must first be viewed along side the companys Times Interest Earned to ensure the company can support the debt. In a time of increased sales however, the company has been able to increase capital equipments and pay down debt which is really good sign for the company. The Time-Interest-Earned ratio showed some mixedShow MoreRelatedEssay about financial analysis1439 Words   |  6 Pagesï » ¿SPARTECH Corporation 2009 2010 Industry Average Current Ratio 1.6 times 1.5 times 2.26 Quick Ratio 0.88 times 0.85 times 0.87 Average collection period 51 days 48 days 13 days Days inventory held 28 days 31 days 134 days Days payable outstanding 47 days 52 days 37 days Cash Conversion Cycle Read MoreHbr When Your Core Business Is Dying74686 Words   |  299 Pageso div an gies t de o e e ma sing our ener , hav a 1992 by incre ce †¢ Sin further go 4%. by 2 n: Take eps g St o brin vron ear t Che nay billio CHEVRON is a registered trademark of Chevron Corporation The CHEVRON HALLMARK and HUMAN ENERGY are trademarks of Chevron Corporation  ©2006 Chevron Corporation A l rights reserved APRIL 2007 Features 58 What Your Leader Expects of You Larry Bossidy A longtime CEO reveals the behaviors that leaders should look for in their subordinates – behaviors