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Capella University MBA FPX 5010_FPX5010_FordCandace_Assessment3-REVIEWED AND EDITRD BY EXPERTS

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1 Performance Evaluation Performance Evaluation Candace N Ford Capella University Performance Evaluation Executive Summary The purpose of this document is to give my recommendation of Ace Com... pany’s request for a $3-million, 10-year loan to purchase production equipment and develop accompanying software. The company has provided its financial statements for fiscal years ending 2016 & 2017 (See Appendix 1). I have also included various financial ratios (Appendix 2) that will be discussed in detail within this executive summary. Ace Company’s Key Performance and Trends  Accounts Receivable Trends – Ace Company makes all customer sales on credit. The accounts receivable turnover ratio measures the number of times over a given period that a company collects its average accounts receivable. In 2017 and 2016 the Ace Company’s Accounts Receivable turnover was 5.06 times and 4.68 times respectively. This 8% increase indicates that Ace has become more efficient in the overall collection of revenue and implemented efficiencies in using its assets. It also have favorable growth in sales of 11%.  Inventory Turnover – This ratio represents the speed at which a company can sell inventory. This is a critical measure of business performance. The average industry rate for Ace Company is 10 times per year. Ace Company’s 2017 and 2016 were 1.82 and 1.94 respectively. Compared to the industry, Ace Company’s rate of inventory turnover is slower than the industry average. If all other aspects are similar to their competitors, then they are making more profit than Ace for each dollar they have invested in their inventory. In addition, with the 6% decline, Ace’s inventory trend is not improving.  Credit Worthiness – [Show More]

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