Answer To: The requirements of this project is that the paper be between 8-10 pages, to include a Title and...
David answered on Dec 22 2021
Introduction
Smith & Wesson (W) is a manufacturer in United States founded in 1852. It deals in the
firearms with corporate headquarters in Springfield, Massachusetts. They have been known for
the different types of ammunition. Revolvers and Pistols manufactured by Smith & Wesson are
used by police, armed forces and spot shooters. It was formed in 1852 by partners Daniel B.
Wesson and Horace Smith to produce a lever-action pistol. The ammunition types which Smith
& Wesson manufactures are .22 Short, .32 S W, .32 S&W Long, .460 S&W Magnum, .45 S&W
Schofield etc.
Ruger Sturm Ruger also deals in the firearms but it is a manufacturer of American made
firearms incorporated in Southport known with a name Ruger. Ruger is the fourth largest
firearms manufactured in United States. It is founded in 1949 by Alexander McCormick Sturm
and William B. Ruger. The ammunition which Ruger manufactures are full automatic, semi-
automatic, single shot rifle, semi-automatic pistols, shotguns, single and double action revolvers’
and bolt action.
Financial analysis is the analysis of the financial statements of the two or more
companies or same companies for two or more years. It gives the flawless picture of the
performance factors of any organization. It helps in comparing and evaluating the past as well as
present performance.
Financial analysis is important for investors, outsiders and management. It gives a picture
of how an organization is functioning and in what direction it is moving. Financial analysis is
done with the help of Ratio analysis, comparative analysis and common size analysis. Annual
reports, 10 k reports of the respective companies are used to do the financial analysis.
Ratio Analysis
The most common tool of financial analysis is ratio analysis. Ratio analysis is a tool
which is used to conduct a quantitative and qualitative analysis of company’s financial statement.
We generally compare current year ratios with previous year ratios so as to judge the overall
performance of company. It is an effort to develop a relationship between the items in income
account or balance sheet. The ratio analysis utility is not limited to internal parties only but to
banks, lending institutes and credit supplier also. Ratio analysis also tells about the capital
structure, credit policy and creditworthiness of an organization.
Various types of ratios are:
Fiscal year
Smith &
Wesson
Holding Co
(SWHC)
Ruger
Sturm
Ruger
(RGR)
Quick Ratio
(Current Assets - Inventory - Prepaid
Expenses) / Current Liability
1.624
1.36
Current Assets $190,714 $96,921
Current Liabilities $83,345 $59,491
Inventory $55,296 $16,009
Current Ratio Current Assets / Current Liabilities 2.28 1.63
Current Assets $190,714 $96,921
Current Liabilities $83,345 $59,491
Debt to Equity Ratio Total Liabilities / Shareholder’s equity N/A N/A
Total Liabilities $0 $0
Shareholders’ Equity $112,844 $95,032
Long-term-debt-to-equity
ratio Long term debt/ Equity N/A N/A
Long term debt $0 $0
Equity $112,844 $95,032
Inventory turnover Cost of goods sold / Average Inventory 10.272 39.09
Cost of goods sold $284,008 $312,871
Average Inventory $27,648 $8,004
Accounts receivable
turnover
Credit Sales / Average Accounts
Receivable
90.78
20.36
Credit Sales $411,997 $491,824
Average Accounts Receivable $4,538 $24,151
Average collection period
(Days * Average accounts receivable) /
Credit Sales 4 days 17 days
Average Accounts Receivable $4,538 $24,151
Credit Sales $411,997 $491,824
Gross profit margin Gross Profit/ Net Sales 0.31 0.36
Gross Profit $127,989 $178,953
Sales $411,997 ...