IndustryRatiosRatioGnG Ratios1. Current Ratio5.37.082. Acid Test Ratio5.16.83. Gross Profit Ratio30%40%4. Net Income Margin7.5%18.2%5. Receivable Turnover Ratio14.416. Return on Asset Ratio12%9.29%7. Debt to Asset Ratio1:4LA 1Interpretation and verbal analysis compared to industry ratios:Liquidity1.2.Profitability3.Solvency

Solution:- Liquidity ratios:- It measures liquidity position of the company. The following are the…

Answered: 1. Current Ratio 5.3 7.08 2. Acid Test…

Business

Accounting

1. Current Ratio 5.3 7.08 2. Acid Test Ratio 5.1 6.8 3. Gross Profit Ratio 30% 40%

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Industry
Ratios
Ratio
GnG Ratios
1. Current Ratio
5.3
7.08
2. Acid Test Ratio
5.1
6.8
3. Gross Profit Ratio
30%
40%
4. Net Income Margin
7.5%
18.2%
5. Receivable Turnover Ratio
14.41
6. Return on Asset Ratio
12%
9.29%
7. Debt to Asset Ratio
1:4
LA 1
Interpretation and verbal analysis compared to industry ratios:
Liquidity
1.
2.
Profitability
3.
Solvency

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