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BFIN Assign

The document defines various financial ratios used to analyze a company's performance and financial health. It provides examples of ratios calculated for a company in 20X3 and 20X2. The ratios indicate the company has a high current ratio, allowing it to easily pay short-term debts. Inventory turns over about every 47 days, showing good sales levels. The company's gross profit ratio of 44% is high but its return on sales of 33% is quite low. The return on assets of 17% means it cannot easily turn profits into new assets.

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Fiona Antoinette Besa
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60 views3 pages

BFIN Assign

The document defines various financial ratios used to analyze a company's performance and financial health. It provides examples of ratios calculated for a company in 20X3 and 20X2. The ratios indicate the company has a high current ratio, allowing it to easily pay short-term debts. Inventory turns over about every 47 days, showing good sales levels. The company's gross profit ratio of 44% is high but its return on sales of 33% is quite low. The return on assets of 17% means it cannot easily turn profits into new assets.

Uploaded by

Fiona Antoinette Besa
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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Ratios

Current ratio=Current Assets/Current Liabilities


Quick Ratio = Cash + Accounts Receivable/ Current Liabilities
Accounts Receivable Tunover = Net Credit Sales/ Average Accounts Receivable
Days' sales in accounts receivable = Average acciunts receivable/Average daily credit sales
Inventory Turnover = COGS/Average Inventories
Days' sales in inventory = inventory/ COGS * 365
Gross Profit Ratio = Gross Profit/ Nets sales * 100
Return on sales = Operating Income/ Revenue
Return on assets = Operating Income/ Total Assets
Return on Equity = net income/ equity
Earnings per share = net income-preferred dividends/ Weighted Average Shares Outsatnding
Price-earnings Ratio =share price/ earnings per share
Dividend Yield = annual dividend/current stock Price
Payout Ratio = dividends per share/earnings per share
EVA = (R-K) X A
Debt Ratio = total liabilities/ total assets
Times Interest Earned = operating income + depreciation/ interest
Cash Flow to Debt = Operating Cash Flow/Liabilities
20X3 20X2
1650000/670000 = 2.46 1590000/630000 = 2.52 the company has a high current ratio which translates o
180000+850000/670000 = 1.54 200000+830000/630000 = 1.63 the company has enough quick assets to pay it's curren
/840000 =

4825000/590000 =8.18 This means every a month and a half, inventories are so
(620000/4825000)365 = 46.9 this means in every 47 days, inventories are turned into
(3825000/8650000)100 =44.22% The company has a high gross profit ratio which means
1270000/3825000 = 0.33 The company has a revenue that results into 33% prfit w
1270000/7270000 =0.17 The company cannot easily turn its profit into assets wi
840000/5600000 = 0.15 The profit of the company will give a 15% return on the

1670000/7270000 =0.23 It shows that the company has more equity than it's ass
1270000 + 420000 /360000 = 4.69 the company has earnings that are not isgnificantly grea
1220000/1670000 = 0.73 The company has a shorter time is paying all of its debt
t ratio which translates on paying short term debts easier
k assets to pay it's current liabilities

a half, inventories are sold or used up meaning there are lots of sales.
ventories are turned into sales which make it quite fast
profit ratio which means the company did a great job onits sales.
at results into 33% prfit which is quite low
n its profit into assets with a 17% ROA
give a 15% return on the stockholders.

more equity than it's assets.


are not isgnificantly greater than the annual interest obligations.
me is paying all of its debts.

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