Computation of Ratios
Not what you're looking for?
Industry Average Actual 2009 Actual 2010
Current Ratio 1.3 1.0
Quick Ratio 0.8 0.75
Average Collection Period 23 Days 30 Days
Inventory Turnover 21.7 19
Debt Ratio 64.7% 50%
Times Interest Earned 4.8 5.5
Gross Profit Margin 13.6% 12.0%
Net Profit Margin 1.0% 0.5%
Return on Total Assets 2.9% 2.0%
Return on Equity 8.2% 4.0%
Income Statement
Sales Revenue $100,000
Less: Cost of Goods Sold 87,000
Gross Profit $13,000
Less: Operating Expenses 11,000
Operating Profit $2,000
Less: Interest Expense 500
Net Profit before Taxes $1,500
Less: Taxes (40%) 600
Net Profit after Taxes $900
Assets
Cash $1,000
Accounts Receivable 8,900
Inventories 4,350
Total Current Assets 14,250
Gross Fixed Assets $35,000
Less: Accumulated Depreciation 13,250
Net Fixed Assets 21,750
Total Assets $36,000
Liabilities and stock holder equity
Accounts Payable $ 9,000
Accrual 6,675
Total Current Liabilities $15,675
Long Term Debt 4,125
Total Liabilities $19,800
Stockholders' Equity:
Common Stock 1,000
Retained Earnings 15,200
Total Stockholders' Equity $16,200
Total Liabilities & Stockholders' Equity $36,000
The current ratio is 2010 is?
Since 2009 the liquidiy has increased or decreased?
The net working capital in 2010 was?
The inventory turnover in 2010 was?
The inventory management since 2009 has?
The average collection period in 2010 was?
The gross profit margin and net profit margin pecets in 2010 were?
The return on total assets in 2010 was?
The return on equity in 2010 was?
Purchase this Solution
Solution Summary
The solution helps in computation of Ratios.
Solution Preview
2010 Comments
Current Ratio= Current Assets/Current Liabilities 0.909090909 Liquidity has declined as the ratio has declined
Net Working Capital= Current Assets-Current Liabilities -1425 Negative working capital indicates thin ...
Purchase this Solution
Free BrainMass Quizzes
Writing Business Plans
This quiz will test your understanding of how to write good business plans, the usual components of a good plan, purposes, terms, and writing style tips.
Operations Management
This quiz tests a student's knowledge about Operations Management
Team Development Strategies
This quiz will assess your knowledge of team-building processes, learning styles, and leadership methods. Team development is essential to creating and maintaining high performing teams.
Social Media: Pinterest
This quiz introduces basic concepts of Pinterest social media
Basics of corporate finance
These questions will test you on your knowledge of finance.