For each ratio listed, identify whether the change in ratio value from the Prior Year te favorable or unfavorable. Ratio Current Year Prior Year Change 1. Profit margin 9% 7% 54 % 2. Debt ratio 55 % 3. Gross margin 36 % 45 % 4. Acid-test ratio 1.20 1.23 5. Accounts receivable turnover 5.0 6.3 6. Basic earnings per share 1.20 $ 1.08 7. Inventory turnover 8. Dividend yield 5.0 4.9 4.0 % 3.8 % %24
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- 2) Ratios Based on the information given in picture #1, complete the following ratios for the last TWO years and indicate whether the trend is favorable or unfavorable. Note percentages and times should be to one decimal place (e.g. 14.8%; 5.8x) Profitability Ratios Current Yr. Prior Yr. Fav/Unfav. Gross Margin (%) {Gross Income/Sales Revenue} Profit Margin (%) {Net income/ Sales Revenue} Return on Assets (%) {Net Income/ Average Total Assets}Required: Compute the following: (For Requirements 1 to 4, enter your percentage answers rounded to 2 decimal places (i.e., 0.1234 should be entered as 12.34).) 1. Gross margin percentage. 2. Net profit margin percentage. 3. Return on total assets. 4. Return on equity. 5. Was financial leverage positive or negative for the year? 1. Gross margin percentage % 2. Net profit margin percentage % 3. Return on total assets % 4. Return on equity % 5. Financial Leverage= The current year financial statements for Blue Water Company and Prime Fish Company are presented below. Prime Fish Balance sheet Cash Accounts receivable (net) Inventory Property & equipment (net) Other assets Total assets Current liabilities Long-term debt (interest rate: 15%) Capital stock ($10 par value) Additional paid-in capital Retained earnings Total liabilities and stockholders' equity Income statement Sales revenue (1/2 on credit) Cost of goods sold Operating expenses Net income Other data Per share stock price at end of current year Blue Water $ 42,300 44,500 92,500 159,500 85,300 $ 424,100 $ 92,500 74,100 157,100 30,300 70,100 $ 424,100 $ 427,500 (234,500) (163,600) $ 29,400 $ 23.3 45% $ 19,700 34,900 47,800 416,600 318,000 $ 34,300 $ 837,000 $ 68,500 62,600 525,000 107,300 73,600 $ 837,000 $ 789,000 (401,300) (312,300) $ 75,400 $28 45% Average income tax rate Dividends declared and paid in current year Both companies are in the fish catching and manufacturing business.…
- 1. Compute the following ratios for the comparative periods (2018 and 2019). The company used 365 days in its computation for some of the ratios. Show your solution. d. Accounts Receivable Turnover Ratio e. Average Collection Period f. Inventory Turnover Ratio g. Average Days in Inventory h. Number of days in Operating Cycle i. Debt to Total Assets Ratio j. Debt to Equity Ratio k. Times Interest Earned Ratio l. Gross Profit Ratio m. Profit Margin Ratio n. Return on Assets o. Return on Equity p. Assets Turnover RatioDefinitional problems: Listed are 11 terms that relate to ratio analysis:1. Book value per share2.Inventoryturnover3. Debt-to-equity ratio4. Average collection period5. Average sales period6. Return on common equity7. Earnings per share8. Price/earnings ratio9. Return on total assets10. Current ratio11. Accounts-receivable turnoverChoose the financial ratio or term from the list that most appropriately completes each of the following statements:1. The__________ tends to have an effect on the market price per share asreflected in the price/earnings ratio.2. The__________ indicates whether a stock is relatively cheap or relativelyexpensive in relation to current earnings. 3. The________ measures the amount that would be distributed to holders of common stock if all assets were sold at their balance-sheet carrying amount and if all creditors were paid off.4. The_____________ is a rough measure of how many times a company'saccounts…INSTRUCTIONS Determine the following measures for both 20Y8 and 20Y9, rounding percentages and ratios other than per-share amounts to one decimal place. Briefly explain how or why management would use this information and comment on the trend from 20Y8 and 20Y9. Working capital Current ratio Quick ratio Accounts receivable turnover Number of days’ sales in receivables Inventory turnover Number of days’ sales in inventory Ratio of fixed assets to long-term liabilities Ratio of liabilities to stockholders’ equity Times interest earned Asset turnover Return on total assets Return on stockholders’ equity Return on common stockholders’ equity Earnings per share on common stock Price-earnings ratio Dividends per share Dividend yield
- 2) Ratios Based on the information given in picture #1, complete the following ratios for the last TWO years and indicate whether the trend is favorable or unfavorable. Note percentages and times should be to one decimal place (e.g. 14.8%; 5.8x) Liq./Solv. Ratios Current Yr. Prior Yr. Fav/Unfav. Current Ratio (X) {Total. Current Assets/ Total Current Liabilities} Quick Ratio (X) {Cash + Short term Investments + Current Receivables/ Current Liabilities} Day's Sales Uncollected (days) {Total Accounts Receivables / Sales x 365}How to Compute the following ratios i. Gross Profit % ii. Operating profit % iii. Net Profit % iv. Current Ratio v. Acid Test Ratio vi. Cash Ratio vii. Cash Operating Cycle in days viii. Average Debt collection Period in days ix. Average Creditor Payment Period in days x. Average Stock Holding Period in days xi. Total liabilities to Total Equity Ratio xii. Interest Cover Ratio xiii. Return on Total Assets xiv. Return on Equitya. Compute the current ratio for the current year. (Abbreviations used: STI = Short-term investments. Round your answer to two decimal places, X.XX.) Current ratio More Info a. Current ratio b. Cash ratio c. Acid-test ratio d. Inventory turnover e. Days' sales in inventory f. Days' sales in receivables g. Gross profit percentage Print Done Choose from any list or enter any number in the input fields a Financial Statements Balance Sheet: Cash Short-term Investments Net Accounts Receivables Merchandise Inventory Prepaid Expenses Total Current Assets Total Current Liabilities Income Statement: Net Credit Sales Cost of Goods Sold $ Current Year Preceding Year 15,000 $ 11,000 56,000 64,000 13,000 159,000 132,000 465,000 317,000 29,000 27,000 94,000 82,000 7,000 239,000 89,000
- 2) Ratios Based on the information given in picture #1, complete the following ratios for the last TWO years and indicate whether the trend is favorable or unfavorable. Note percentages and times should be to one decimal place (e.g. 14.8%; 5.8x) Liq./Solv. Ratios Current Yr. Prior Yr. Fav/Unfav. Inventory Turnover (X) {Cost of Goods Sold/ Average Inventories} Day's Sales in Inventories (days) {Ending Total Inventories/ Cost of Goods Sold x 365} Debt Ratio (%) {Total Liabilities / Total Assets }Use the financial ratios of company A and company B to answer the questions below. Company A Company B Yr t+1 Year t Yr t+1 Year t Current ratio 0.55 0.59 0.56 0.55 Accounts receivable turnover 6.22 6.25 5.06 4.87 Debt to total assets 40.5% 40% 67.8% 65.9% Times interest earned 8.80 30.6 5.97 6.33 Free cash flows (in millions) ($3,819) $3,173 $168 $550 Return on stockholders’equity 7.7% 7.7% 26.6% 23.3% Return on assets 4.3% 4.3% 8.9% 7.9% Profit margin…1. Compute the following ratios for the comparative periods (2018 and 2019). The company used 365 days in its computation for some of the ratios. Show your solution. a. Working Capital b. Current Ratio c. Acid Test Ratio d. Accounts Receivable Turnover Ratio e. Average Collection Period f. Inventory Turnover Ratio g. Average Days in Inventory h. Number of days in Operating Cycle i. Debt to Total Assets Ratio j. Debt to Equity Ratio k. Times Interest Earned Ratio l. Gross Profit Ratio m. Profit Margin Ratio n. Return on Assets o. Return on Equity p. Assets Turnover Ratio