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Do the Cann’s have a liquidity problem?

Do the Cann’s have a liquidity problem?. You are the analyst. Which plan does the most to improve liquidity? What caused the current ratio to increase? Is that good or bad? In which plan is the ranch’s liquidity position deteriorating?. Are the Cann’s solvent?. You are the analyst.

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Do the Cann’s have a liquidity problem?

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  1. Do the Cann’s have a liquidity problem?

  2. You are the analyst.... • Which plan does the most to improve liquidity? • What caused the current ratio to increase? Is that good or bad? • In which plan is the ranch’s liquidity position deteriorating?

  3. Are the Cann’s solvent?

  4. You are the analyst.... • Which plan improves financial position? • Which plan results in the highest leverage position? • Which plan does the most to improve financial position?

  5. Are the Cann’s profitable?

  6. You are the analyst.... • Which plan generates the highest rate of return? • What causes the changes in the rate of return between different plans? • How might the Cann’s improve ROA?

  7. Do the Cann’s have a repayment capacity problem?

  8. You are the analyst.... • Which ranch plan (if any) has an interest expense ratio that is of concern? • How might the Canns improve their interest expense ratio?

  9. You are the analyst.... • How would you expect the asset turnover to ratio to differ for a plan in which most assets are rented?

  10. You are the analyst... • Would the Canns be better off selling out and putting the proceeds in the bank if they could earn 5%?

  11. You are the analyst.... • Would it be all right if the Canns buy a new Suburban (fully loaded, of course)? • Are tax records sufficient to determine whether a business is profitable?

  12. You are the lender.... • What questions would you have about the values used in the balance sheet? • Is the level of family living expenses a concern? • How would two off-farm jobs influence your view of repayment capacity? • If you were the lender, what additional information would you want to have?

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