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Petra Corp Review

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Petra Corporation
In reviewing the financial reports and ratios for Petra Company over a three year period we can see that the company is relatively healthy financially. It seems that by looking deeper into some of Petra Corporation ratios that they could make some good improvements to increase their overall financial health.
Petra Corporation is in a health position when looking at several key components of their ratios. Both Petra’s current ratio and quick ratio is right in line with the levels that banks are looking at for idea numbers in order to secure loans. The only number that didn’t quite meet expectations was the quick ratio in 2011 coming in at .95/1 and it was only off standards by.05.
The biggest area that highlights Petra’s Corporate strength is the debt to total assets ratio. If the ratio is higher than the industry average of approximately 55-63% then the chance is they could go solvent with a down turn in the market. They may have a large interest payment that could dig into their profits and cash very quickly. Petra Corporation has a debt to total asset ratio that has averaged around 43% over the last three year. This is well below the industry average and shows that the company does not have a huge debt compared to their assets. The other area of interest is that their debt to total asset ratio did not have but a 1-2% change from year to year. Petra Corporation seems to have spent some time correcting their issue in days of receivables. In 2010 it was an extremely high 76 days to collect on receivables which is about 35 days above national averages. It appears with that being a focus area the days of receivables were reduced to 49.77 in 2011 and lowered even more in 2012 to 42.12. That is still 12 days above the set 30 days, so some more improvement can be done. Petra corporations can strengthen themselves financially if they focus

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