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    Ratio Analysis

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    Betsen Boutique also has asked you to calculate selected financial ratios and compare them with industry norms.

    Use the same data supplied in question 3, reproduced attached, along with Income Statement information from Question 3.

    See attached file for full problem description.

    Item 2004 2003

    Accounts Payable $12,000 $10,700
    Accounts Receivable $54,400 $55,300
    Accumulated Depreciation $30,200 $27,900
    Cash & Equivalents $10,500 $9,700
    Common Stock $40,500 $40,500
    Cost of Goods Sold $108,400 $92,600
    Depreciation $2,300 $2,250
    Fixed Expenses $7,600 $7,000
    Interest $3,400 $2,900
    Inventory $42,700 $37,800
    Long-term Debt $32,000 $29,800
    Other Current Liabilities $8,400 $8,600
    Plant & Equipment $56,900 $53,000
    Retained Earnings $22,700 $18,200
    Sales $150,500 $138,200
    Selling, G & A $15,500 $13,400
    Short Term Notes $18,700 $20,100
    Tax Rate 30% 30%

    BETSEN BOUTIQUE
    Financial Ratios
    as of Dec. 31, 2004

    Industry
    Ratio 2004 2004 2003

    Current 2.60x

    Inventory Turnover 3.00x
    A/R Turnover 4.50x
    Total Asset Turnover 2.40x

    Debt Ratio 50.00%

    T.I.E. 6.00x

    Net Profit Margin 9.25%
    Return on Assets 11.00%
    Return on Equity 20.00%

    What are your recommendations to management?

    © BrainMass Inc. brainmass.com June 3, 2020, 8:06 pm ad1c9bdddf
    https://brainmass.com/business/debt-ratio/ratio-analysis-123886

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    Solution Summary

    The solution explains the calculation of various ratios and comparison with industry

    $2.19

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