Tire City Case

Tire City, Inc. Analysis As a lender, I would choose no problem giving a loan to Tire City, Inc to dish finance their growth for the following reasons. The first thing that is apparent is the annual revenue growth. It is expected to steadily increase by 5% in the coming years. This means that Tire City has strong operating bills flows to fund its day-to-day operations. Additionally, Tire City, Inc has improved in total plus turnover over the years, suggesting that they are indeed growing their revenue in proportion to sales. Also, their net margin, gross margin, and return on equity apply stayed constant over the years.It is good that there has been no significant subside in these ratios. Furthermore, their noteworthy sales growth from 93-97 suggests they are conclusion ways to bring in more money such as increasing their prices. Another thing to be considered is the inventory turnover and payables period. It could be a concern that the inventory turnover period is at most 60 days however, the payables period has been decreasing over the past fewer years, which means that Tire City is able to pay off approximately of their debt to creditors more frequently.Also, the companys current ratio has been improving with only when a slight drop in 1996. This proves the company has liquidity and is having no problem generating cash. Plus, it is apparent that the company has more assets than equity as the years move forward, meaning that they are trying to lower their financial leverage and their level of risk as they continue to grow. All things considered, I would be comfortable loaning funds to Tire City, Inc to finance their growth for it seems they subscribe to the resources necessary to pay back this loan in the future.