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Computing 14 Financial Ratios from Financial Statements

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Please help compute the following ratios in Excel. Provide formulas. See attached file for data.

Current Ratio
Acid-Test Ratio
Accounts Receivable Turnover
Inventory Turnover
Profit Margin
Asset Turnover
Return on Assets
Return on Common Shares
Price Earnings Ratio
Payout Ratio
Debt to Assets
Times Interest Earned

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Solution Preview

Good afternoon,

Please find attached file with your answers. I have computed 2013 as well since it was just a formula copy. I included all the formulae to make it clear.

Hope this helps.

Paul Cerisano MBA, MEd

2014 2013 Formulae
Current Ratio 1.5 :1 1.4 Current Assets (CA) / Current Liabilites (CL)
Acid-Test Ratio 0.93 :1 0.89 (CA-Inv) / CL
Accts Rec Turnover 5.9 x 5.6 Sales / Accounts ...

Solution Summary

This solution provides the computations for 14 ratios from the Balance Sheet and Income Statement. Ratios computed involve: current ratio, acid-test ratio, accounts receivable turnover, inventory turnover, and profit margin. It provides all formulae definition and excel paths to solution.