Title: Calculating and Analyzing Ratios
Based on the financial information provided, calculate thefollowing ratios and explain their purpose: Current Ratio InventoryTurnover Ratio
Accounts Receivable TurnoverRatio
Debt to Equity Ratio
Return on Assets Ratio
Asset Turnover Ratio
Return on Equity Ratio
Profit Margin Ratio
Price-Earnings Ratio
Dividend Yield Ratio
12/31/2010 12/31/2009 Amount in Dollars Amount in Dollars Cash 200.00 150.00 Receivables 500.00 350.00 Inventories 750.00 755.00 Other Current Assets 100.00 75.00 Total Current Assets 1,550.00 1,330.00 Plant and Equipment 1,100.00 1,170.00 Other Long - Term Assets 150.00 100.00 Total Assets 2,800.00 2,600.00 Accounts Payable 510.00 400.00 Other Current Liabilities 25.00 25.00 Total Current Liabilities 535.00 425.00 Long Term Debt 375.00 400.00 Other Long Term Liabilities 225.00 175.00 Preferred Stock 250.00 250.00 Shareholders' Equity 1,415.00 1,350.00 Total Liabilities and Shareholders' Equity 2,800.00 2,600.00
Title: Calculating and Analyzing Ratios
Based on the financial information provided, calculate thefollowing ratios and explain their purpose: Current Ratio InventoryTurnover Ratio
Accounts Receivable TurnoverRatio
Debt to Equity Ratio
Return on Assets Ratio
Asset Turnover Ratio
Return on Equity Ratio
Profit Margin Ratio
Price-Earnings Ratio
Dividend Yield Ratio
| 12/31/2010 | 12/31/2009 | ||
| Amount in Dollars | Amount in Dollars | ||
| Cash | 200.00 | 150.00 | |
| Receivables | 500.00 | 350.00 | |
| Inventories | 750.00 | 755.00 | |
| Other Current Assets | 100.00 | 75.00 | |
| Total Current Assets | 1,550.00 | 1,330.00 | |
| Plant and Equipment | 1,100.00 | 1,170.00 | |
| Other Long - Term Assets | 150.00 | 100.00 | |
| Total Assets | 2,800.00 | 2,600.00 | |
| Accounts Payable | 510.00 | 400.00 | |
| Other Current Liabilities | 25.00 | 25.00 | |
| Total Current Liabilities | 535.00 | 425.00 | |
| Long Term Debt | 375.00 | 400.00 | |
| Other Long Term Liabilities | 225.00 | 175.00 | |
| Preferred Stock | 250.00 | 250.00 | |
| Shareholders' Equity | 1,415.00 | 1,350.00 | |
| Total Liabilities and Shareholders' Equity | 2,800.00 | 2,600.00 |
Related questions
Based on the financial information provided, calculate thefollowing ratios and explain their purpose:
Current Ratio
Inventory Turnover Ratio
Accounts Receivable Turnover Ratio Debt to Equity Ratio
Return on Assets Ratio
Asset Turnover Ratio
Return on Equity Ratio
Profit Margin Ratio
Price-Earnings Ratio
Dividend Yield Ratio
Note: When a balance sheet amount is related toan income statement amount in computing a ratio, the balance sheetamount should be an average of that period. The average iscalculated by adding the ending balances of this year and last yearand dividing the result by 2. Describe how a bank lending officermight use ratio analysis. Select five ratios that would be mostuseful for the purpose and explain the rationale for yourselection.
12/31/10 | 12/31/09 | |
Amount in Dollars | Amount in Dollars | |
Cash | 200.00 | 150.00 |
Receivables | 500.00 | 350.00 |
Inventories | 750.00 | 755.00 |
Other Current Assets | 100.00 | 75.00 |
Total Current Assets | 1,550.00 | 1,330.00 |
Plant and Equipment | 1,100.00 | 1,170.00 |
Other Long - Term Assets | 150.00 | 100.00 |
Total Assets | 2,800.00 | 2,600.00 |
Accounts Payable | 510.00 | 400.00 |
Other Current Liabilities | 25.00 | 25.00 |
Total Current Liabilities | 535.00 | 425.00 |
Long Term Debt | 375.00 | 400.00 |
Other Long Term Liabilities | 225.00 | 175.00 |
Preferred Stock | 250.00 | 250.00 |
Shareholders' Equity | 1,415.00 | 1,350.00 |
Total Liabilities and Shareholders' Equity | 2,800.00 | 2,600.00 |
Year-2010 | Year-2009 | |
Amount in Dollars | ||
Net Sales | 3500.00 | 3200.00 |
Cost of Goods Sold | 2200.00 | 2100.00 |
Other Expenses | 300.00 | 250.00 |
Depreciation | 77.00 | 62.00 |
Interest Expenses | 40.00 | 46.00 |
Tax | 200.00 | 150.00 |
Net Income | 683.00 | 592.00 |
Preferred Stock Dividend | 25.00 | |
Common Stock Dividends | 260.00 | |
Market Value of Equity | 4000.00 | |
Average Number of Shares | 100.00 | |
Share Price | 40.00 | |
Dividends per Share | 2.60 | |
Earnings per Share | 6.58 | |
