BUSI 4005 Chapter Notes - Chapter 5: Profit Margin, Net Income, Ratia
Document Summary
Use the information for purrfect pets below to calculate each of the required numbers. Assume that expenses include taxes and the company has no other sources of revenue: determine the debt-to-assets ratio for the company as of december 31, 2011 and december 31, 2012. Compare and interpret the results: determine the asset turnover ratio for the company during the year 2012, determine the net income for the company for 2011 and 2012. Compare and interpret the results: determine the net profit margin ratio for the company for 2011 and 2012. Explain what these calculations indicate in light of your answer to part c: debt-to-assets ratio: Se = cc + re se = ,100 + ,700 = ,800. Debt-to-assets ratio = ,800 ,600 = 0. 425 or 42. 5% Debt-to-assets ratio = ,200 ,300 = 0 . 339 or 33. 9% The company"s debt-to-assets ratio fell from december 31, 2011 to december 31, 2012, reducing the financing risk and improving the creditworthiness of the company.