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Huffman Trucking Co - Ratio Analysis

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.


Solution Preview

2006 2005
1) Liquidity ratios

a) Current ratio

Current Assets/ Current Liabilities 1.26 1.27

b) Acid-test (quick) ratio

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%

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%

3) ...

Solution Summary

This solution provides calculations in Excel for various financial ratios.