Fundamentals of Financial Management, Concise Edition (MindTap Course List)
9th Edition
ISBN: 9781305635937
Author: Eugene F. Brigham, Joel F. Houston
Publisher: Cengage Learning
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Can you please give me correct answer the general accounting question?
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- Using the statements provided Calculate the following liquidity ratios: Current ratio Quick ratio Calculate the following asset management ratios: Average collection period Inventory turnover Fixed asset turnover Total asset turnover Calculate the following financial leverage ratios Debt to equity ratio Long-term debt to equity Calculate the following profitability ratios: Gross profit margin Net profit margin Return on assets Return on stockholders’ equity For example: you should present it like the text, or as:Gross margin = 1,933 divided by 8,689 = 22.2% A competitor of ACME has for the same time period reported the following three ratios: Current ratio 1.52Long-term debt to equity .25 or 25%Net profit margin .08 or 8% Given these three ratios only which company is performing better on each ratio? Also overall who would you say has the best financial performance and position. Support your answer.arrow_forwardGiven the following information for the Duke Tire Company, find the firm's debt ratio (i.e., total liabilities / total assets): ROE (N/E) = 0.37 (expressed as a decimal) Total asset turnover ratio (S/A) = 2.2 Net profit margin (N/S) = 0.09 (expressed as a decimal)arrow_forwardFinancial metricsfor crystal GlobeTravel include a total asset turnoverof 1,25 and a return equity of14,30 %, and a debit ratio of 15 % with total asset amounting to R3588 as per the statementof financial position, and considering the financing structure comprising both debt and equity,what is the net profit margin of the company?arrow_forward
- GIVE AN INTERPRETATION OF THESE RATIOS CONCLUSIVELY Acid test ratio = (total current asset – inventory – prepaid expenses) / total current liability Total asset turnover = 1.918 times Gearing ratio = 0.2243 or 22.43% Gross profit margin = 0.361 or 36.1% Net profit margin = 0.1143 or 11.43% Return on capital employed = 0.2664 or 26.64% Current ratio = 2.1753 times Acid test ratio = 1.0413 times Receivables days = (Trade Receivables/Net Sales) * 365 = (74480/768400) *365 = 36 days Payables days = (Trade Payables/ Net Purchases) * 365 = (72000/460400) *365 = 58 days Inventory Days = (Inventory/ Cost of goods sold) * 365 = (84000/476400) * 365 = 65 days Gross Profit Margin (GPM) = 292000/808800*100= 36.10% Net Profit Margin (NPM) = 92480/808800 *100 = 11.43% Return on Capital Employed (ROCE) = 92480/327080*100 = 28.27% Current ratio = 162280/74600= 2.17 Acid test ratio = (162280- 84000)/74600= 1.049 Total asset turnover = Sales revenue / Total average asset…arrow_forwardWhat are the annual sales for adorn with $0.5 M in liabilities a total debt ratio of 0.5 and an asset turnover of 4.0 assume assets remain unchanged?arrow_forwardFind ROAarrow_forward
- Need answer with this accounting questionarrow_forwardWhat company is better in the short term investmentarrow_forward8. Trend Ratios, Application of some Financial Ratios and their Interpretation Some of the balance sheet and income statement figures of Sapphire Mfg. CO. for 2016, 2017 and 20181 are as follows. 2018 P30,000 2016 2017 Quick assets P40,000 P48,000 65,000 25,000 80,000 50,000 Current assets 50,000 40,000 110,000 200,000 Investments 160,000 135,000 Plants, property and equipment, net Total assets 250,000 265,000 Current liabilities 45,000 50,000 100,000 75,000 Long Term debt Total stockholders' equity 40,000 50,000 105,000 125,000 125,000 Total liabilities and stockholders' Equity 200,000 400,000 240,000 250,000 265,000 Sales 375,000 500,000 Cost of goods sold Operating expenses (including Depreciation of P10,000) 255,000 290,000 110,000 95,000 105,000 Net income 50,000 50,000 130,000 a) Compute for the trend ratios based on the above given data and give your interpretation of the 2017 and 2018 figures.arrow_forward
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