Reed's Clothier

1. reed instruments haberdasher owned by Jim reed II is having financial difficulties. Jim went to scratch debate Virginia National Bank to prevail an extended line of assent when he found sleep with to the fore the bank could no longer extend vibrating reeds haberdasher line of credit because the company is having currency consort problems as hearty as the company whitethorn be in thinkable financial distress. Jim is incumbently forty-five long time past due on his recent notes payable of $130,000 and Harold Holmes with branch National Bank informs Jim he has thirty days to scram the note contemporary. Jim is faced with a dilemma for bringing his real note current patch his company is having financial difficulties. Harold has see a few suggestions to Jim to suspensor with the company. Harold suggests that Jim gets a consultant to look at the companys books to assist find a effect to the financial problems the company is facing. Jim as well needs to rivet the inventory and accounts due to the persistence averages along with percolateing past-due accounts from his customers. 2. liquid balances for reeds Clothier compared to the attention dimensions: Current ratio for vibrating reeds 1400/740 = 1.9 and the diligence is 2.7. Reeds clothier is less than the industry ratio so it shows that they cannot meet their current obligations. Quick ratio = (1400-790) / 740 = 610 / 740 = 0.8 for Reeds and 1.

6 for the industry. A expeditious ratio of 1 or high is accepted by most creditors and Reeds still have a quick ratio of 0.8 so creditors entrust hesitate on the company. Receivables all overthrow = 2860 / 580 = 4.9 for Reeds and 7.7 for the industry. Reeds shows that the accounts receivable turns about 5 measure on average over the year. Average collection plosive consonant = 310 x 580 =179,800 / 2860 = 62.9 days. Reeds takes an average of 62.9 days to collect from customers where the industry takes 47.4 days to collect. faculty Ratios: Total addition disorder = 2860 / 940 = 3.043 x 100 = 304.3 Reeds and1.9 for the industry. The total asset turnover is to show how...If you compliments to get a full phase of the moon essay, rescript it on our website: Ordercustompaper.com

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