Financial Ratios
Not what you're looking for?
Can someone please put these answers listed on an excel worksheet with formulas included. I cannot figure out how to do this.
Granny's Cat farms, Inc.
A. Long-term debt ratio:
Long-term debts are debt liabilities due in one year or more
i.e. long-term debt $65,000 A
Other long-tern debt $25,000 B
Long-term debt $85,000
The LTDR is the rate of long-term debt to total capitalization however; it does not include short-term debt, therefore
i.e. Long-term debt $65,000 A
Other long-tern debt $25,000 B
Shareholders Equity $80,000 C
Capitalization $165,000
LTDR = Long-term Debt / (Long-term debt + Total Shareholders Equity)
= 85,000 / 165,000
= 0.5151
Excel Formula
Written as follows: =(A+B)/(A+B+C)
Where A - C will be the cell name on your spreadsheet eg. =(A1+B1)/(A1+B1+C1)
This rule will be the same for all the following answers
B. Total Debt Ratio:
TDR = (Total Assets - Total Equity) / Total Assets
= (242,000- 80,000) / 242,000
= 0.6694
C. Times Interest Earned:
TIE = Earnings Before Interest & Tax (EBIT) / Interest Expense
= 20800 / 5000
= 4.16
D. Cash Coverage Ratio:
CCR = (EBIT + Depreciation) / Interest Expense
= (20800 + (12,000+ 5,700) / 5,000
= 38,500 / 5,000
= 7.7
E. Current ratio:
CR = Current Assets / Current Liabilities
= 102,000 / 77,000
= 1.325
F. Quick Ratio:
QR = (Current Assets - Inventory) / Current Liabilities
= (102,000 -12,000) / 77,000
= 1.169
G. Operating Profit Margin:
OPM = Net Income / Sales
= 20,440 / 95,000
= 0.2155
= 21.55%
H. Inventory Turns:
IT = Cost of Goods Sold / Inventory
= 40,000 / 12,000
= 3.333
I. Days In Inventory:
DII = 365 / Inventory Turns (H. above)
= 365 / 3.333
= 109.511
J. Average Collection Period:
ACP = Sales / Accounts Receivable
NB: In this case, Accounts Receivable is taken to be the difference between the 'Other Current Assets' from the beginning to the end of year 200X
i.e. 15,000 - 12,000 = $3,000
= 95,000 / 3,000
= 31.667 days
K. Return on Equity:
ROE = Net Income / Total Equity
= 20,440 / 80,000
= 0.2555
= 25.55%
L. Return on Assets:
ROA = Net Income / Total Assets
= 20,440 / 242,000
= 0.0845
= 8.45%
Purchase this Solution
Solution Summary
This posting provides calculation on several financial ratios
Purchase this Solution
Free BrainMass Quizzes
Basics of corporate finance
These questions will test you on your knowledge of finance.
SWOT
This quiz will test your understanding of the SWOT analysis, including terms, concepts, uses, advantages, and process.
Motivation
This tests some key elements of major motivation theories.
Cost Concepts: Analyzing Costs in Managerial Accounting
This quiz gives students the opportunity to assess their knowledge of cost concepts used in managerial accounting such as opportunity costs, marginal costs, relevant costs and the benefits and relationships that derive from them.
Organizational Behavior (OB)
The organizational behavior (OB) quiz will help you better understand organizational behavior through the lens of managers including workforce diversity.