Explore BrainMass

financial statements, calculate ratios for 2010

See attached file.


Solution Preview

See attached files.

Given the following balance sheet, income statement, historical ratios and industry averages,

1. Calculate the financial ratios for the most current year.
Current Ratio= Current Assets/Current Liabilities 1.67

Quick Ratio= Quick Assets/Current Liabilities 0.96

Inventory Turnover= COGS/Inventory 7 times

Average collection period = Receivables/Daily credit sales 41.56944 days

Total Asset Turnover= Sales/Assets 2.080976

Debt ratio= Debt/Total Assets 0.188

Interest coverage ratio= Operating Profit/Interest 5.500104

Gross profit margin = Gross Profit /sales 18.3%

Net Profit Margin= Net Profit/Sales 2.5%

The return on total assets = Net Profit/Total Assets 5.2%

The return on equity = Net Profit/Stockholder's equity 11.1%

Operating profit margin = Operating Profit /sales 5.1%

Please see the attached excel file for calculations

2. Analyze its overall financial situation for the most recent year. Break your analysis into an evaluation of the firm's liquidity, activity, debt and profitability.

Income Statement
For the Year ...

Solution Summary

Solution explains calculations of ratios for 2010