Purchase Solution

Calculation of Financial Ratios

Not what you're looking for?

Ask Custom Question

Calculation of Ratios

The financial information below was taken from the annual financial statements of
2006 2005
Current assets $240,000 $212,000
Current liabilities 80,000 90,000
Total liabilities 182,000 160,000
Total assets 520,000 480,000
Sales 400,000 370,000
Cost of goods sold 240,000 220,000
Inventory 100,000 125,000
Receivables 100,000 60,000
Net income 50,000 48,000
Net cash provided by operating activities 30,000 25,000

Instructions
Calculate the following ratios for Harris Company for 2006.
1. Current ratio.
2. Average collection period.
3. Current cash debt coverage ratio.
4. Debt to total assets ratio.
5. Cash debt coverage ratio.
6. Return on assets.
7. Profit margin ratio.
8. Asset turnover ratio.

Purchase this Solution

Solution Summary

This Solution demonstrates how to calculate the requested financial ratios for Harris Company.

Solution Preview

Calculate the following ratios for Harris Company for 2006.
1. Current ratio.
= Current assets / Current liabilities = 240,000 / 80,000 = 3

2. Average collection period.
= Current Accounts Receivable Balance / Average Daily Sales
= ...

Purchase this Solution


Free BrainMass Quizzes
Organizational Behavior (OB)

The organizational behavior (OB) quiz will help you better understand organizational behavior through the lens of managers including workforce diversity.

Social Media: Pinterest

This quiz introduces basic concepts of Pinterest social media

Accounting: Statement of Cash flows

This quiz tests your knowledge of the components of the statements of cash flows and the methods used to determine cash flows.

Marketing Management Philosophies Quiz

A test on how well a student understands the basic assumptions of marketers on buyers that will form a basis of their marketing strategies.

Organizational Leadership Quiz

This quiz prepares a person to do well when it comes to studying organizational leadership in their studies.