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Business ratios

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APPENDIX... Use to calculate ratios

Income Statement
2007

Sales 3,000

Cost of Goods (1,350)

Sell,Admin,Gen'l Expenses (1,050)

Interest Expense (150)

Profit Before Tax 450

Tax (180)

Profit after Tax 270

Balance Sheet
12/31/2007

Receivables 275
Inventory 175
Current Assets 450
Fixed Assets 650

Total Assets 1,100

Trade Payables 250
Short term Debt 50
Long term debt 150
Total Liabilities 450

Capital Stock 300
Retained earnings 350
Total Equity 650

Total Liab & Equity 1,100

Some questions I need help with are:

What is the Gross Profit for 2007 ?

What is your Operating profit ?

What is the Profit after tax margin (%)?

What is the Return on Assets (%)?

What is the Return on Equity (%)?

Calculate DSO's for 2007

How does the DSO in the above question compare to an Industry avg DSO of 35 days?

A Favorably
B Unfavorably

What is the Inventory turn rate ?

How does the Turn rate above compare to an Industry avg turn of 8 x's ?

A Favorably
B Unfavorably

What is the quick ratio ?

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Solution Summary

Response provides the steps to compute the Business ratios

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Sales 3,000

Less Cost of Goods -1,350

Gross Profit 1,650

Less Sell,Admin,Gen'l Expenses -1,050

Operating Profit 600

Interest Expense (150)

Profit Before Tax 450

Tax (180)

Profit after Tax 270

What is the Profit after ...

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