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Ratio Analysis

See the attachment.

20X1 20X2 20X3
current ratio 1.2 1.15 1.1
A/R turnover 15 16 17
Asset turnover 2 2.1 2.2
Profit margin 7% 7.50% 8%
EPS $2.20 $2.30 $2.40
PE 11 12 13
Equity multiplier 2 2.1 2.2

Questions
1. Comment on the firm's changing liquidity across the three-year period.
2. What is the firm's share price at the end of 20X3?
3. What is the firm's ROA for 20X2?
4. What is the firm's ROE for 20X3?
5. Comment on the firm's changing profitability across the three-year period.

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Solution Preview

Please see the attached file

20X1 20X2 20X3
current ratio 1.2 1.15 1.1
A/R turnover 15 16 17
Asset turnover 2 2.1 2.2
Profit margin 7% 7.50% 8%
EPS $2.20 $2.30 $2.40
PE 11 12 13
Equity multiplier 2 2.1 2.2

Questions
1. Comment on the firm's changing liquidity across the three-year period.
2. What is the firm's share price at the end of 20X3?
3. What is the firm's ROA for 20X2?
4. What is the firm's ROE for ...

Solution Summary

The solution explains the changes in liquidity and profitability of the firm.

$2.19