Ratio Number Alpha analysis
Liquidity:Current ratio 1.7 The Current Ratio for the Alpha corporation is 1.7 which is good as I found when it is greater than 1, it means the corporation can provide additional cushion to avoid unexpected circumstances in short term.
http://accounting-simplified.com/financial/ratio-analysis/current.html

The current ratio can give a sense of the efficiency of a company’s operating cycle or its ability to turn its product into cash.

http://www.investopedia.com/terms/c/currentratio.asp

Recommendation:
(A/R is $395,000 is high; give the customers less days to pay)

delayed payments by customers will lead to increase the debtor’s level and eventually the current assets and therefore the current ratio
1- Faster Conversion Cycle of Debtors or Accounts Receivables.
2- Pay off Current Liabilities.( A/P= 300,000)

How to analyze and improve Current Ratio?

Acid test ratio 1.04 The acid test ratio measures the liquidity of a company by showing its ability to pay off its current liabilities with quick assets.
A company with a quick ratio of 1 indicates that quick assets equal current assets. This also shows that the company could pay off its current liabilities without selling any long-term assets.

Quick Ratio

Companies with an acid-test ratio of more than 1 have the liquid assets to pay their current liabilities

If the acid-test ratio (1.04) is much lower than the current ratio (1.7), it means that current assets are highly dependent on inventory.

http://www.investopedia.com/terms/a/acidtest.asp

Recommendation:

Even though it’s over than 1, it should be treated with caution.

One of the quickest ways to improve the quick ratio would be to pay off the current bills (A/P = 300,000)

And at the same time increase sales (560,000) (increase advertising, discounts) so that the cash on hand or AR increases.

A/R give customers credit terms 1/10 ,net 30 ( to collect the money quickly)
Improving the Collection Period or ARs

https://www.efinancemanagement.com/financial-analysis/how-to-analyze-interpret-and-improve-acid-test-quick-ratio
Ratio Number Alpha analysis
Debt utilization:
debt to total asset 0.5 The debt ratio shows a company’s ability to pay off its liabilities with its assets. In other words, this shows how many assets the company must sell in order to pay off all of its liabilities.

A lower debt ratio usually implies a more stable business with the potential of longevity because a company with lower ratio also has lower overall debt. Each industry has its own benchmarks for debt, but .5 is reasonable ratio.
A debt ratio of .5 is often considered to be less risky

Debt Ratio

Recommendation:
1-Increase the Sales: The company can focus heavily on increasing the sales but without any increase in overhead expenses (discount). The increase in sales can be used to reduce the debt and improve the debt to total asset ratio.

How to Analyze and Improve Debt to Total Asset Ratio?

Times interest earned 8.8 times A ratio of 8.8 means that a company makes enough income to pay for its total interest expense 8.8 times over. Said another way, this company’s income is 4 times higher than its interest expense for the year.

More times is better
*The larger ratios are considered more favorable than smaller ratios.
*Higher ratios are less risky while lower ratios indicate credit risk.

Times Interest Earned Ratio

* Higher value of times interest earned ratio is favorable meaning greater ability of a business to repay its interest and debt.
http://accountingexplained.com/financial/ratios/times-interest-earned

http://strategiccfo.com/wikicfo/time-interest-earned-ratio-analysis/
high ratio can also mean that a company has an undesirably low level of leverage or pays down too much debt with earnings that could be used for other investment opportunities to get higher rate of return.
http://strategiccfo.com/wikicfo/time-interest-earned-ratio-analysis/

Generally, a ratio of 2 or higher is considered adequate to protect the creditors’ interest in the firm. A ratio of less than 1 means the company is likely to have problems in paying interest on its borrowings.

Times interest earned (TIE) ratio

Recommendation:

Ratio Number Alpha analysis
Profitability:
Return On Asset. 0.05 The return on assets ratio or ROA measures how efficiently a company can manage its assets to produce profits during a period.

ROA shows how efficiently a company can convert the money used to purchase assets into net income or profits.

Return on Assets Ratio – ROA

It only makes sense that a higher ratio is more favorable to investors because it shows that the company is more effectively managing its assets to produce greater amounts of net income. A positive ROA ratio usually indicates an upward profit trend as well. ROA is most useful for comparing companies in the same industry as different industries use assets differently.

Return on Assets Ratio – ROA

Thus higher values of return on assets show that business is more profitable.

Recommendation:
An increasing trend of ROA indicates that the profitability of the company is improving. Conversely, a decreasing trend means that profitability is deteriorating.
http://accountingexplained.com/financial/ratios/return-on-assets
*Increasing Revenues.
* Reducing Expenses.
http://smallbusiness.chron.com/improve-return-total-assets-56271.html

Return On Equity. 0.11 The return on equity ratio is a profitability ratio that measures the ability of a firm to generate profits from its shareholders investments in the company. In other words, the return on equity ratio shows how much profit each dollar of common stockholders’ equity generates.

Return on Equity (ROE) Ratio

A company with high return on equity is more successful to generate cash internally. Investors are always looking for companies with high and growing returns on equity
http://strategiccfo.com/wikicfo/return-on-equity-analysis/

Recommendation:

http://www.fool.com/investing/general/2015/01/21/5-ways-to-improve-return-on-equity.aspx

http://smallbusiness.chron.com/improve-return-equity-59183.html

https://www.equitymaster.com/detail.asp?date=2/9/2009&story=3&title=How-can-your-company-increase-its-ROE

Gross Profit Margin Ratio 0.29 This ratio measures how profitable a company sells its inventory or merchandise. In other words, the gross profit ratio is essentially the percentage markup on merchandise from its cost.

Gross Margin Ratio

Ratio Number Alpha Analysis
Asset Utilization:
Account Receivable Turnover 5.79Times
Average Age of account Receivable 63 Days
Inventory Turnover 4 times
Average Age of inventory 87 days
Asset Turnover Ratio 0.86