Financial ratios for Walgreens
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Using the most current financial statements for Walgreens, calculate and compare the financial ratios listed below. The financial statements can be located on the web.
Liquidity Measures- Working capital, Current ratio, Acid test ratio
Activity Measures- Total asset turnover, Inventory turnover
Profitability Measures- Gross profit rate, Profit margin rate, Return on investment, Return on equity, Earnings per share
Financial Leverage Measures- Debt ratio, Debt/equity ratio, Times interest earned ratio
Cite strengths and weaknesses of ratios.
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Solution Summary
The solution examines the financial ratios for Walgreens. The financial ratios are calculated and compared.
Solution Preview
Please see the attached Excel spreadsheet.
Liquidity Measures
Working Capital Ratio and Current Ratio are the same
Current Ratio:
Current Assets / Current Liabilities
Current Assets 10,183.50
Current Liabilities 7,502.30
Current Ratio 1.3574
Acid Test Ratio:
Current Assets - Inventory / Current Liabilities
Current Assets 10,183.50
Current Liabilities 7,502.30
Inventory 7,063.80
Acid Test Ratio: 0.3796
Activity Measures
Total Asset Turnover:
Sales / Assets
Sales $15,015.70
Assets $21,587.60
Total Asset Turnover: $0.70
Inventory Turnover
Cost of Goods Sold / ...
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