Financial Analysis of Nutrisystem Inc.

Paper Summary:

The paper focuses on leverage ratios, liquidity ratios, efficiency ratios and profitability ratios as they relate to NutriSystem, Inc. (NTRI). The paper aims to determine some financial strengths and weaknesses of the firm and to suggest some changes to NTRI's future plans to improve the firm's financial performance. The paper provides the figures and shows how NTRI appears to be in sound financial health. According to the paper, a few minor adjustments to borrowing policies and credit policies may be in order.

Outline:
Leverage Ratios
Liquidity Ratios
Efficiency Ratios
Profitability Ratios
Conclusion

From the Paper:

"Leverage ratios are used to measure the relationship between debt and equity within the firm, or how much financial leverage the firm has taken on. A common leverage ratio used is the total debt ratio, which is simply the total liabilities divided by the total assets. In the case of NTRI the total debt ration is 0.27, a pretty respectable figure. This ratio shows that for every 1 dollar in assets the firm is only carrying 27 cents in liabilities. Because this ratio is low NTRI has the opportunity to take on more debt should the need arise."

Sample of Sources Used:

• Brealey, R. A., Myers, S. C., & Marcus, A. J. (2007). Fundamentals of corporate finance (5th ed.). The McGraw-Hill Companies.

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