Case 1 Jones Electrical Distribution

Brief Introduction

Jones Electrical Distribution Jones Dave

Verden 24000 8% Verden

Jones
Jones

Goal:

Short-term sources of funds

Long-term plan/concern for the companys future

Solution

2004

2005

2006

2007

ROE
ROA
Financial leverage
Debt ratio
Current ratio
Acid ratio
Days sales in inventory

7.6%
2.9%
2.6
68.7%
2.14
1.05
68 days

13.6%
4.4%
3.1
68%
1.91
0.97
66 days

12.3%
3.8%
3.2
69%
1.64
0.71
76 days

14.7%
4.3%
3.4
71%
1.43
0.52
84 days

Days sales in receivables

42 days

44 days

43 days

41 days

ROE Financial leverage(

) current ratio

Acid ratio Current ratio Inventory current assets

Days sales in inventory

( Inventory,
)

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Short-term sources of funds ($330,000)

Metropolitan Bank ($250,000)

Southern Bank&Trust ($350,000)

Accounts receivables 75% Inventory 50%
() 7.5%+1.5% = 6%~9%

4 5%
2007 Jones 2.8978
3.25% 8.25%

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