Financial Ratios: Accounts Receivable, Debt Ratio, P/E Ration, ROE
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(3-1) Days Sales Outstanding
Greene Sisters has a DSO of 20 days. The companys average daily sales are $20,000. What is the level of its accounts receivable? Assume there are 365 days in a year.
(3-2) Debt Ratio
Vigo Vacations has an equity multiplier of 2.5. The companys assets are financed with some combination of long-term debt and common equity. What is the companys debt ratio?
(3-3) Market/Book Ratio
Winston Washers stock price is $75 per share. Winston has $10 billion in total assets. Its balance sheet shows $1 billion in current liabilities, $3 billion in long-term debt and $6 billion in common equity. It has 800 million shares of common stock outstanding. What is Winstons market/book ratio?
(3-4) Price/Earnings Ratio
A company has an EPS of $1.50, a cash flow per share of $3.00, and a price/cash flow ratio of 8.0. What is its P/E ratio?
(3-5) ROE
Needham Pharmaceuticals has a profit margin of 3% and an equity multiplier of 2.0. Its sales are $100 million and it has total assets of $50 million. What is its ROE?
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The solution assists in answers different financial ratio questions.
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- MBA, California State University, Sacramento
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