Merchandise consisting of clothing, home furnishings and many other relatively inexpensive products help yield a high receivable turnover. HBC's receivable turnover rate of 12.19 times a year is reflected in its average collection period of about a month, 29.94 days. Conversely, Canadian Tire's merchandise consists of more expensive products, including car parts, mechanical equipment, and house and home products. As a result, Canadian Tire's turnover rate of 5.89 times a year is substantially lower. Although HBC's receivable turnover rates are much higher, Canadian Tire does not look less attractive in the eyes of creditors. The differences in the products sold causes Canadian Tire's turnover rate to be so much lower. Although Canadian Tire's merchandise compromises its solvency through a low receivable turnover rate, it is expected.
Inventory Turnover: HBC's inventory turnover rate is quite low, definitely lower than it should be. The company's high gross profit rate allows it to have a low inventory turnover. However, HBC's high gross profit rate is not enough to compensate for its extremely low inventory turnover of 2.86 times a year. Stated by HBC's management in their annual report, it is their intention to increase the inventory turnover rate up to 4 in the next few years. The company's low inventory turnover reflects is high average days to sell inventory. HBC may become a more sound investment if management's plan to increase inventory turnover is successful. In sharp contrast to HBC, Canadian tire has a very high inventory turnover rate of 8.4 times a year. This high inventory turnover rate helps the company to obtain a low average days to sell inventory figure of 43.45 days. When comparing HBC to Canadian Tire based on inventory turnover, Canadian Tire is a significantly stronger investment. .
Solvency.
Debt Ratio: From the view of creditors, HBC's debt ratio of 47% is fairly high.
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The purpose of this memo is to indicate the main problem facing Treadway Tire and to provide suggestions to resolve problems related to the company's goals, values, and strategies. Treadway Tire's Lima Plant is now facing a high turnover rate among line foremen, who are over pressured in daily work. ... Foremen describe the company as a "jungle" and say that "we're between a rock and a hard place" (Treadway Tire Company Case, 2007, p. 4). ... Conclusion This analysis was based on the Treadway Tire Company's current high foremen turnover rate and job dis...
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