y intimately understanding and building a proprietary relationship with their core customer: Mom. They will accomplish this advantage by giving mothers compelling reasons to visit the R Us family of stores offering unique and exciting content at a good value. Their goal is to help mothers successfully complete their missions by having the products she wants, and by providing information and services she needs to enhance their position as the authority on children’s merchandise. They are also working to ensure that mothers have a good environment in which to shop when she visits one of their stores, making the process as easy and convenient for her as possible. And, Finally they are going to communicate the changes taking place within the R Us family of stores through a strategic marketing campaign beginning at the start of next year, and by building a lasting relationship with mom. Part III Financial Analysis Liquidity RatiosJan-01Jan-00Jan-99Jan-98Jan-97IndustryCurrent Ratio1.241.011.041.251.241.56Acid Test Ration0.210.270.250.170.360.2Accounts Receivable Turnover55.6961.4658.9469.626872.1Inventory Turnover3.64.243.593.33.272.5Days Sales In Receivables7.155.526.575.715.155.14Days Sales In Inventory102.4884.8581.07111.39112.3146Liquidity Index82.716276.394.5378.44N/ADays Purchases In Accounts Payable49.4666.7464.6156.1259.26N/AAverage Net Trade Cycle60.1723.6323.0360.9858.19N/ACash Provided by Operations to Average Current Liabilities0.150.20.120.350.32N/ALiquidity ratios give the analyst insight on a companies ability to meet short-term obligations. These ratios are used to evaluate a companies overall risk. One of the most significant ratios used to determine a firm’s liquidity is the current ratio. This ratio tells us the firm’s ability to cover current maturing obligations. From our analysis of Toys R Us we have determined that they are just covering their short-term obligations with current assets. This is one ...
