Question

**Liquidity
Ratios:**

**- Working Capital:
$234,379**

**- Current Ratio:
1.34**

**- Inventory Turnover: 13.88
times**

**Solvency
Ratios:**

**- Debt to Asset Ratio:
75%**

**- Times Interest Earned:
2656**

**Profitability
Ratios:**

**- Gross Profit Rate:
50%**

**- Profit Margin:
17.7%**

**What accounting recommendations do you have for the new
company?**

**What business recommendations do you have to help the
new company?**

Answer #1

Match each of the following ratios with the appropriate ratio
class (liquidity ratio, profitability ratio or solvency ratio)
Question 28 options:
123
Current ratio
123
Earnings per share
123
Quick ratio
123
Working capital
123
Asset turnover
123
Solvency ratio
1.
Liquidity ratio
2.
Profitability ratio
3.
Solvency ratio

For each of the following financial statement ratios, identify
whether the ratio provides analysis regarding a firms:
Profitability
Liquidity
Solvency
Common stockholder valuation
Earnings Per Share (EPS)
Quick ratio
Gross profit percentage (or margin)
Dividend Yield
Price to Earnings ratio
Accounts receivable turnover
Operating cash flow to current liabilities ratio
Days' sales in inventory
Debt to Equity ratio
Return on sales
Return on assets
Current ratio

Q9 to Q12- Write the formula for the following ratios and what
each ratio measures:
Return on equity (ROE)
Return on assets (ROA)
Gross profit
Gross margin
Profit margin (also called the “net profit margin”)
Asset turnover
Fixed-Asset Turnover
Inventory Turnover
Inventory Period (also called “days inventory
outstanding”)
Collection Period (also called “account receivable
period”)
Payables Period (also called “account payable period”)
Operating Cycle
Cash Conversion Cycle
Financial Leverage (also called “equity multiplier” )
Debt-to-assets ratio
Debt-to-equity ratio
Times interest...

You are the loans manager at a local bank. Two companies have
approached you about securing a 6-month loan. Based on your
calculations, please comment on the following:
Asses and comment on the Liquidity Ratio, Solvency Ratio and
Profitability ratio. Which company would you prefer to give the
loan and explain why.
Liquidity
Working
Capital:
Company
1
Company
2
Which is
better?
897
420
Current
Ratio:
1.40
1.16
Quick
Ratio:
1.16
0.95
Receivable Turnover:
12.44
7.76
times
times
Average
Collection...

Choose 2 of the following stocks: Pfizer (pfe), Disney (dis),
Cisco (csco), Sysco (syy), or Qualcomm (qcom). For each of the
stocks, look up or compute ratios below. You don’t have to use the
stocks above. If you would like to use other stocks, feel free to
do so as long as they are public, listed on the NYSE or NASDAQ,
have market capitalizations of at least $500 million, and have
positive earnings (i.e. not losing money). 1-Common Stock Ratios:...

There are three categories: liquidity, solvency, and profitability.
Describe what each category tells the user about the financial
health of a company.
Choose three ratios in each category and describe what the
ratios tell the user about the company. How are the financial
ratios used to evaluate a company.
Discuss what the numbers would be compared against for
analysis
Calculate each ratio for your companies. What do the ratios
tell you about each of your companies

Coca-Cola
Purpose Financial ratio analysis is one of the best techniques
for identifying and evaluating internal strengths and weaknesses.
Potential investors and current shareholders look closely at firms’
financial ratios, making detailed comparisons to industry averages
and to previous periods of time. Financial ratio analyses provide
vital input information for developing an IFE Matrix
Financial Ratios for Coca-Cola (2018)
Liquidity Ratios:
- Current ratio:
- Quick ratio:
Leverage Ratios:
- Debt-to-total-assets ratio:
- Debt-to-equity ratio:
- Long-term debt-to-equity ratio:
-...

Liquidity measures
The current ratio is (Round to two decimal places.)
The firm's net working capital is(Round to the nearest
million dollars.)
Activity measures
The firm's total asset turnover is ? (Round to two decimal
places.)
Leverage measures
The firm's debt-equity ratio is? (Round to two decimal
places.)
The firm's times interest earned ratio is (Round to two
decimal places.)
Profitability measures
The firm's net profit margin is %? (Round to two decimal
places.)
The firm's return on assets (ROA)...

Compute and Interpret Liquidity, Solvency and Coverage
Ratios
Selected balance sheet and income statement information from
Verizon Communications Inc. follows.
($ millions)
2016
2015
Current assets
$ 26,395
$ 22,355
Current liabilities
30,340
35,052
Total debt
108,078
109,729
Total liabilities
220,148
226,333
Equity
24,032
17,842
Earnings before interest and taxes
27,059
33,060
Interest expense
4,376
4,920
Net cash flow from operating activities
$ 22,715
$ 38,930
Round all your answers to two decimal places.
(a) Compute the current ratio for...

What insights do these ratios provide about R&E’s financial
performance? What problems, if any, does the company appear to
have?
Profitability ratios:
2008
2009
2010
2011
Return on equity (%)
17.1%
17.3%
15.7%
11.7%
Return on assets (%) -
11.3%
10.3%
7.7%
5.0%
Return on invested capital (%) -
18.7%
18.9%
17.4%
12.9%
Profit margin (%) -
3.3%
2.9%
2.4%
1.4%
Gross margin (%) -
16.0%
15.0%
15.0%
14.0%
Turnover-control
ratios:
Asset turnover (X) -
3.4
3.6
3.2
3.5
Inventory...

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