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Analyzing Pro Forma Statements Paper

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Analyzing Pro Forma Statements Paper
Gregory Curry
FIN/571
April 22, 2015 CRISTINA MARINE

Analyzing Pro Forma Statements Analyzing Pro Forma Statements

can be used internally or externally to determine how financially stable a company is whether International or within the USA, ratios play a key role in determining how a company is doing financially either for the good or the bad or indifferent. I we will use three common ratios to determine how financially stable from how Shimizu International and Lexmark US based company balance sheets with their business information is doing these last three years. Balance sheets from Shimizu International and Lexmark, companies no matter the industry no company wants a current ratio less than one because this suggests that the company has more liabilities than assets meaning that in the short run they will be more likely not able to pay their debts. This is why “the current ratio is a popular financial ratio used to test a company's liquidity also referred to as its current or working capital position by deriving the proportion of current assets available to cover current liabilities” (Richard Loth, 2015). The figures for both Shimizu International and Lexmark companies will display their current ratios from 2012, 2013 and 2014. It's takes time to convert a company's working capital, in this case Shimizu International and Lexmark assets into cash to pay its current obligations that is the key when looking at their to liquidity. Current ratio can be misleading, this is why having a simplistic and somewhat accurate comparison of these two companies current position will display their weakness when relying on their current ratio as a working capital numbers as…...

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