Huffman Trucking Co - Ratio Analysis
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Use the information contained in Huffman Trucking Co. balance sheet and income statement to calculate the following ratios (balance sheet and income statements below:
Liquidity ratios
Current ratio
Acid-test (quick) ratio
Receivables turnover
Inventory turnover
Profitability ratios
Asset turnover
Profit margin
Return on assets
Return on common stockholders' equity
Solvency ratios
Debt to total assets
Times interest earned
Be sure to show your calculations for each ratio & prepare a horizontal and vertical analysis for the balance sheet and the income statement.
See attached file for data.
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Solution Summary
This solution provides calculations in Excel for various financial ratios.
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2006 2005
1) Liquidity ratios
a) Current ratio
Current Assets/ Current Liabilities 1.26 1.27
b) Acid-test (quick) ratio
(CURRENTASSETS- Prepaid expenses)/CURRENT LIABILITIES 1.22 1.23
c) Receivables turnover
Sales/Accounts receivables 15.63 14.05
d) Inventory turnover
Sales/ Inventory NA NA
As inventory is Nil
2) Profitability ratios
a) Asset turnover
Sales/ Assets 3.86 3.80
b) Profit margin
Net Profit after taxes 2.18% 2.33%
Sales
c) Return on assets
Operating Income 13.92% 14.96%
Total Assets
d) Return on common stockholders' equity
Net profit after tax 28.60% 28.60%
Equity
3) ...
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