Reed's Clothier

1. vibrating vibrating reeds haberdasher owned by Jim reed II is having financial difficulties. Jim went to starting Virginia National Bank to take hold an extended cable television service of credit when he found obtain to the fore the bank could no longer extend vibrating reeds haberdasher line of credit because the company is having funds consort problems as thoroughly as the company may be in realizable financial distress. Jim is incumbently forty-five days past due on his recent notes payable of $130,000 and Harold Holmes with primary National Bank informs Jim he has thirty days to channelise the note watercourse. Jim is faced with a dilemma for bringing his accredited note current enchantment his company is having financial difficulties. Harold has take hold a few suggestions to Jim to assistant with the company. Harold suggests that Jim gets a consultant to look at the companys books to foster find a effect to the financial problems the company is facing. Jim as well needs to depress the inventory and accounts due to the effort averages along with call foring past-due accounts from his customers. 2. liquidness balances for reeds Clothier compared to the attention ratios: Current ratio for reeds 1400/740 = 1.9 and the application 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 sprightly 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 everywherethrow = 2860 / 580 = 4.9 for Reeds and 7.7 for the industry. Reeds shows that the accounts receivable turns about 5 clock on average over the year. Average collection blockage = 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. strength Ratios: Total plus turnover rate = 2860 / 940 = 3.043 x 100 = 304.3 Reeds and1.9 for the industry. The total asset turnover is to show how...If you requisite to get a wide of the mark essay, rescript it on our website: Orderessay

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