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Financial Analysis Of Real & Virtual Companies

Financial Analysis of Virtual and Real Companies

ZeroMillion.com, 2006, states

The Current Ratio is one of the best known measures of financial strength. It is figured as shown below:
Current Ratio = Total Current Assets / Total Current Liabilities
A generally acceptable current ratio is 2 to 1. But whether or not a specific ratio is satisfactory depends on the nature of the business and the characteristics of its current assets and liabilities. The minimum acceptable current ratio is obviously 1:1, but that relationship is usually playing it too close for comfort

Huffman Trucking and J B Hunt have a current ratio of 1:1 while Knight Transportation has a current ratio of 3.6:1. The current assets for Huffman Trucking and J B Hunt are almost the same as their current liabilities. Knight Transportation has current assets of $96,070 and current liabilities of $26,154. Knight should not experience any difficulty paying their obligations. Huffman Trucking and J B Hunt should look at other methods to increase their current assets or decrease their current liabilities.
I was unable to calculate the current ratio for McBride Financial because they do not have a balance sheet listed on their website. The current ratio for Countrywide Financial is 0.3:1; which is below the minimum acceptable of 1:1. The current liabilities for Countrywide Financial almost four times their current assets; they need to determine what is causing their short/current long-term debt and other current liabilities and find a way to decrease them. As a lender, they should know the importance of a strong current ratio is necessary when obtaining outside financing. The current ratio for Accredited Home Lenders is 0.5:1; which is below the acceptable minimum. Accredited Home Lenders is purchasing almost of their assets through debt instead of with equity, which is decreasing their current ratio.
The current ratio for Kudler Fine Foods is 17:1 and they should not have any difficulty paying...