Watson Leisure

While Watson Leisure Time dissolute Goods is expanding its sales oft more rapidly than others in the industriousness, there are nuzzle clear deficiencies in their performance and I would not put the company. These send word be seen in borders of a communicatory style analysis over time as surface up as a comparative analysis with intentness data. In barriers of meshworkability, the profit margin is declining over time. This is surprising in lightness of the 44% increase in sales over both years (20% per year). Higher selling and administrative costs and involvement expense appear to be causing the problem. The return-on-addition proportion starts out(a) in 2006 above the industry average (9.39% versus 8.22%) and ends up well below it (6.34% versus 8.48% in 2008. The decline of 3.05% for return on summations at Watson Sporting Goods is a big deal, and offer be attri thated to the antecedently mentioned declining profit margin as well as a retardation t otal asset turnover (going from 1.5X to 1.14X). Debt ratios calculated fate how well a company is using its long barrier liabilities.

The debt ratio has increased and has remained higher than the industry value, the times interest free radical earned and the fixed charge coverage has declined and remained lower than the industry value, this indicates that the company is not properly using its long term debts. Return on equity is higher than the industry ratio, further in a trend downwards. The slower turnover of assets mentioned above, can be analyzed through the turn over ratios. A problem can be found in accounts due where turnover has gone fro! m 10X to 6.55X. While inventory turnover has been and corpse superior to the industry, the same cannot be said for fixed asset turnover. A decline from 2.73X to 1.85X was caused by an increase in 112% in fixed assets. Overall, despite a 44 % increase in sales, assets grew even more causing a decline in total asset turnover from 1.50X to 1.14X in 2008.If you want to depict a full essay, order it on our website: OrderCustomPaper.com

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