The monetary position of Roy Rogers Restaurants Financial Analysis can be evaluated by having a look at its ratio analysis.
The declining net success, revealing an unfavorable pattern from 2006 to 2007 recommends that costs have increased far more than the company is able to manage provided its existing resources. With a long term financial obligation adding to the interest cost, Roy Rogers Restaurants Financial Analysis is in dire need of an alternative income stream.
Decreasing Liquidity: We can see a major declining pattern in the existing ratio too revealing a fall in liquidity which is another point of issue for Roy Rogers Restaurants Financial Analysis particularly as it has a long term debt to pay off. With the existing assets not in a position to settle the existing liabilities, we can see how the company would be in a major financial problem unless the capital improves with additional sources of finance.
We could check out the financial condition of Roy Rogers Restaurants Financial Analysis even more by looking at the business's overall financial obligation to total assets ratio in appendix 2. We can see how the overall possessions of the business have been declining from 2005 onwards. The long term debt has actually stayed at $160 million while the short term financial obligation has actually increased side by side. Such a circumstance has brought Roy Rogers Restaurants Financial Analysis to a point where its total debt to total possessions ratio has increased too. An increasing overall debt to total assets ratio suggests that the danger has increased in terms of the business's possessions not being enough to cover its total liabilities. This may not be showing the total liquidity position however gives clarity in terms of the total monetary position of the company.