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Ryanair Case

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Submitted By kpimpr8v3
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A. * Just by comparing financial leverage across the provided companies, tim hortons, macys, komatsu, ryanair, microsoft in decreasing order. Working capital is not a useful metrics for comparison since the companies represent different industries. Looking at current ratio, Microsoft, ryanair, komatsu, macys, tim hortons, in decreasing order. * Accounts receivable may be a reliable indicator since it’s orders/accounts, ect. Inventories may be slighter difficult to fair value. For ex. Microsoft’s inventory is constantly being updated/sector specific. Or Macy’s clothing can be difficult to pinpoint. PPE especially is a challenge. Microsoft has very specific equipment where it can be valued obsolete if a new component arrives ect. Demand can dictate volume/cycle usage of PPE. * Market to book ratio?

B. Compare and contrast the extent to which the companies will likely meet their short-term obligations: Based on working capital and current ratio

* Ryanair – Working capital looks to be improving over the past few years, however, looking at the current ratio, it’s been steady between 1.5-2. No concern here in meeting short term obligations * Microsoft – Big jump in working capital, +56% from last year AND current ratio is at an all time high of 2.60. Looks very healthy in meeting STO from this perspective. MSFT seems to be in good hands to outlast the financial crisis and even expand. Current ratio points to a very healthy expansion prospect. * Tim Hortons – Working capital is shy of the 5 year average of 200K, but this is due to an unusual increase in last year’s working capital of 517K. It’s difficult to tell how it’ll meet its STO based solely on this. Current ratio of 1.30 is indicating (this bump of 517K is due to Tim Hortons Inc. announced that the Company plans to complete the sale of its 50% interest in Maidstone...

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