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**files (5)** – ## Module03RatioAssignmentTemplate132.xlsx – IMG_3452.jpeg – IMG_3453.jpeg – IMG_3454.jpeg – IMG_3455.jpeg **## Module03RatioAssignmentTemplate132.xlsx** ## Ratio Analysis | | | | | | | | | | | | | | | | — | — | — | — | — | — | — | — | — | — | — | — | — …
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**files (5)**
– ## Module03RatioAssignmentTemplate132.xlsx
– IMG_3452.jpeg
– IMG_3453.jpeg
– IMG_3454.jpeg
– IMG_3455.jpeg
**## Module03RatioAssignmentTemplate132.xlsx**
## Ratio Analysis
| | | | | | | | | | | | | | |
| — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| RATIO ANALYSIS |
| | | 1) Ratios | | 2) Grade |
| | Industry Standards | 2019 | 2020 | 2019 | 2020 |
| Liquidity ratios: |
| Current ratio | 5.00 | 6 | 4 | Good |
| Quick ratio | 3.00 | | | | Poor |
| Activity ratios: |
| Inventory turnover | 2.20 |
| Days sales outstanding | 90.00 |
| Fixed asset turnover | 1.00 |
| Total asset turnover | 0.75 |
| | | | | | | | RATIO FORMULAS |
| Profitability ratios: | | | | | | | CURRENT RATIO : Current assets / Current liabilities |
| | | | | | | | QUICK RATIO: (Current assets – Inventory) / Current liabilities |
| Operating profit margin | 20% |
| Return on equity | 9% |
| | | | | | | | INVENTORY TURNOVER: Annual sales / Average inventory | | | | | | Since no previous inventory amount was provided in the problem just use the inventory amount for average inventory in the formula |
| Leverage ratios: |
| Debt ratio | 0.33 | | | | | | DAY SALES OUTSTANDING: Account Receivables / Sales per day | | | | | | -For the Sales per Day you would just use the Sales amount from the income statement. |
| | | | | | | | FIXED ASSET TURNOVER: Annual sales / Fixed assets | | | | | | For the fixed assets you would take the Sales from the Income Statement and divide it by "Net Plant and Equipment" line item in the Balance Sheet. |
| Coverage ratios: | | | | | | | TOTAL ASSET TURNOVER: Annual sales / Total assets |
| Times-interest-earned | 7.00 |
| DATA |
| Balance Sheet | 2019 | 2020 | | | | | OPERATING PROFIT MARGIN: Net income / Sales |
| Assets: |
| Cash | $200 | $150 | | | | | RETURN ON EQUITY: Net income / Equity |
| Account Receivables | 450 | 425 |
| Inventory | 550 | 625 |
| Current assets | 1,200 | 1,200 |
| Plant and equip. | 2,200 | 2,600 | | | | | DEBT RATIO: Total Debt / Total assets | | | | -For the Total Debt you would take the "Current Liabilities" line item then add that amount to "Bonds" line item then divide by "Total Assets" line item. |
| Less: Acc dep | 1,000 | 1,200 |
| Net plant and equip. | 1,200 | 1,400 |
| Total assets | $2,400 | $2,600 | | | | | COVERAGE RATIO: Net Income before taxes / Annual interest expense |
| Liabilities and Owners' Equity: | 2019 | 2020 |
| Accts/Pay | $200 | $150 |
| Notes Pay-Current | 0 | 150 |
| Current liabilities | 200 | 300 |
| Bonds | 600 | 600 |
| Owners' equity | | | | | | – |
| Common stock | 300 | 300 |
| Paid-in Capital | 600 | 600 |
| Retained earnings | 700 | 800 |
| Total owners' equity | 1,600 | 1,700 |
| Total liabilities and owners' equity |
| owners' equity | $2,400 | $2,600 |
| Income Statement: | 2019 | 2020 |
| Sales | $1,200 | $1,450 |
| COGS | 700 | 850 |
| Gross profit | 500 | 600 |
| Operating expenses | 30 | 40 |
| Depreciation | 220 | 200 |
| Net operating income | 250 | 360 |
| Interest expense | 50 | 64 |
| Net income before tax | 200 | 296 |
| Taxes (21%) | 42 | 62 |
| Net income | $158 | $234 |
Instructions:
The financial statements and industry standard ratios are listed below for a hypothetical firm. Complete the blue section.
1) Compute the financial ratios for the firm (columns C and D).
2) Compare both 2019 and 2020 ratios to the industry standards (columns E and F). Label "Good" if the firm's ratio is favorable against the industry ratio. "Poor" if the ratio is unfavorable. See the examples in columns E and F.
3) Give a summary of the company's financial health. Is the company doing well financially? Why or why not? Use at least 3 data points to support your reasoning.
3) type in your answer here.
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**## Module03RatioAssignmentTemplate132.xlsx**
## Ratio Analysis
| | | | | | | | | | | | | | |
| — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| RATIO ANALYSIS |
| | | 1) Ratios | | 2) Grade |
| | Industry Standards | 2019 | 2020 | 2019 | 2020 |
| Liquidity ratios: |
| Current ratio | 5.00 | 6 | 4 | Good |
| Quick ratio | 3.00 | | | | Poor |
| Activity ratios: |
| Inventory turnover | 2.20 |
| Days sales outstanding | 90.00 |
| Fixed asset turnover | 1.00 |
| Total asset turnover | 0.75 |
| | | | | | | | RATIO FORMULAS |
| Profitability ratios: | | | | | | | CURRENT RATIO : Current assets / Current liabilities |
| | | | | | | | QUICK RATIO: (Current assets – Inventory) / Current liabilities |
| Operating profit margin | 20% |
| Return on equity | 9% |
| | | | | | | | INVENTORY TURNOVER: Annual sales / Average inventory | | | | | | Since no previous inventory amount was provided in the problem just use the inventory amount for average inventory in the formula |
| Leverage ratios: |
| Debt ratio | 0.33 | | | | | | DAY SALES OUTSTANDING: Account Receivables / Sales per day | | | | | | -For the Sales per Day you would just use the Sales amount from the income statement. |
| | | | | | | | FIXED ASSET TURNOVER: Annual sales / Fixed assets | | | | | | For the fixed assets you would take the Sales from the Income Statement and divide it by "Net Plant and Equipment" line item in the Balance Sheet. |
| Coverage ratios: | | | | | | | TOTAL ASSET TURNOVER: Annual sales / Total assets |
| Times-interest-earned | 7.00 |
| DATA |
| Balance Sheet | 2019 | 2020 | | | | | OPERATING PROFIT MARGIN: Net income / Sales |
| Assets: |
| Cash | $200 | $150 | | | | | RETURN ON EQUITY: Net income / Equity |
| Account Receivables | 450 | 425 |
| Inventory | 550 | 625 |
| Current assets | 1,200 | 1,200 |
| Plant and equip. | 2,200 | 2,600 | | | | | DEBT RATIO: Total Debt / Total assets | | | | -For the Total Debt you would take the "Current Liabilities" line item then add that amount to "Bonds" line item then divide by "Total Assets" line item. |
| Less: Acc dep | 1,000 | 1,200 |
| Net plant and equip. | 1,200 | 1,400 |
| Total assets | $2,400 | $2,600 | | | | | COVERAGE RATIO: Net Income before taxes / Annual interest expense |
| Liabilities and Owners' Equity: | 2019 | 2020 |
| Accts/Pay | $200 | $150 |
| Notes Pay-Current | 0 | 150 |
| Current liabilities | 200 | 300 |
| Bonds | 600 | 600 |
| Owners' equity | | | | | | – |
| Common stock | 300 | 300 |
| Paid-in Capital | 600 | 600 |
| Retained earnings | 700 | 800 |
| Total owners' equity | 1,600 | 1,700 |
| Total liabilities and owners' equity |
| owners' equity | $2,400 | $2,600 |
| Income Statement: | 2019 | 2020 |
| Sales | $1,200 | $1,450 |
| COGS | 700 | 850 |
| Gross profit | 500 | 600 |
| Operating expenses | 30 | 40 |
| Depreciation | 220 | 200 |
| Net operating income | 250 | 360 |
| Interest expense | 50 | 64 |
| Net income before tax | 200 | 296 |
| Taxes (21%) | 42 | 62 |
| Net income | $158 | $234 |
Instructions:
The financial statements and industry standard ratios are listed below for a hypothetical firm. Complete the blue section.
1) Compute the financial ratios for the firm (columns C and D).
2) Compare both 2019 and 2020 ratios to the industry standards (columns E and F). Label "Good" if the firm's ratio is favorable against the industry ratio. "Poor" if the ratio is unfavorable. See the examples in columns E and F.
3) Give a summary of the company's financial health. Is the company doing well financially? Why or why not? Use at least 3 data points to support your reasoning.
3) type in your answer here.
**IMG_3452.jpeg**
This file is too large to display. [View in new window](https://www.sweetstudy.com/files/img-3452-jpeg-10506751)
**IMG_3453.jpeg**
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**IMG_3454.jpeg**
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**IMG_3455.jpeg**
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**## Module03RatioAssignmentTemplate132.xlsx**
## Ratio Analysis
| | | | | | | | | | | | | | |
| — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| RATIO ANALYSIS |
| | | 1) Ratios | | 2) Grade |
| | Industry Standards | 2019 | 2020 | 2019 | 2020 |
| Liquidity ratios: |
| Current ratio | 5.00 | 6 | 4 | Good |
| Quick ratio | 3.00 | | | | Poor |
| Activity ratios: |
| Inventory turnover | 2.20 |
| Days sales outstanding | 90.00 |
| Fixed asset turnover | 1.00 |
| Total asset turnover | 0.75 |
| | | | | | | | RATIO FORMULAS |
| Profitability ratios: | | | | | | | CURRENT RATIO : Current assets / Current liabilities |
| | | | | | | | QUICK RATIO: (Current assets – Inventory) / Current liabilities |
| Operating profit margin | 20% |
| Return on equity | 9% |
| | | | | | | | INVENTORY TURNOVER: Annual sales / Average inventory | | | | | | Since no previous inventory amount was provided in the problem just use the inventory amount for average inventory in the formula |
| Leverage ratios: |
| Debt ratio | 0.33 | | | | | | DAY SALES OUTSTANDING: Account Receivables / Sales per day | | | | | | -For the Sales per Day you would just use the Sales amount from the income statement. |
| | | | | | | | FIXED ASSET TURNOVER: Annual sales / Fixed assets | | | | | | For the fixed assets you would take the Sales from the Income Statement and divide it by "Net Plant and Equipment" line item in the Balance Sheet. |
| Coverage ratios: | | | | | | | TOTAL ASSET TURNOVER: Annual sales / Total assets |
| Times-interest-earned | 7.00 |
| DATA |
| Balance Sheet | 2019 | 2020 | | | | | OPERATING PROFIT MARGIN: Net income / Sales |
| Assets: |
| Cash | $200 | $150 | | | | | RETURN ON EQUITY: Net income / Equity |
| Account Receivables | 450 | 425 |
| Inventory | 550 | 625 |
| Current assets | 1,200 | 1,200 |
| Plant and equip. | 2,200 | 2,600 | | | | | DEBT RATIO: Total Debt / Total assets | | | | -For the Total Debt you would take the "Current Liabilities" line item then add that amount to "Bonds" line item then divide by "Total Assets" line item. |
| Less: Acc dep | 1,000 | 1,200 |
| Net plant and equip. | 1,200 | 1,400 |
| Total assets | $2,400 | $2,600 | | | | | COVERAGE RATIO: Net Income before taxes / Annual interest expense |
| Liabilities and Owners' Equity: | 2019 | 2020 |
| Accts/Pay | $200 | $150 |
| Notes Pay-Current | 0 | 150 |
| Current liabilities | 200 | 300 |
| Bonds | 600 | 600 |
| Owners' equity | | | | | | – |
| Common stock | 300 | 300 |
| Paid-in Capital | 600 | 600 |
| Retained earnings | 700 | 800 |
| Total owners' equity | 1,600 | 1,700 |
| Total liabilities and owners' equity |
| owners' equity | $2,400 | $2,600 |
| Income Statement: | 2019 | 2020 |
| Sales | $1,200 | $1,450 |
| COGS | 700 | 850 |
| Gross profit | 500 | 600 |
| Operating expenses | 30 | 40 |
| Depreciation | 220 | 200 |
| Net operating income | 250 | 360 |
| Interest expense | 50 | 64 |
| Net income before tax | 200 | 296 |
| Taxes (21%) | 42 | 62 |
| Net income | $158 | $234 |
Instructions:
The financial statements and industry standard ratios are listed below for a hypothetical firm. Complete the blue section.
1) Compute the financial ratios for the firm (columns C and D).
2) Compare both 2019 and 2020 ratios to the industry standards (columns E and F). Label "Good" if the firm's ratio is favorable against the industry ratio. "Poor" if the ratio is unfavorable. See the examples in columns E and F.
3) Give a summary of the company's financial health. Is the company doing well financially? Why or why not? Use at least 3 data points to support your reasoning.
3) type in your answer here.
**IMG_3452.jpeg**
This file is too large to display. [View in new window](https://www.sweetstudy.com/files/img-3452-jpeg-10506751)
**IMG_3453.jpeg**
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**IMG_3454.jpeg**
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**IMG_3455.jpeg**
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