based on the given industry averages. Write the answers in the spaces provided.
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Analyze the following ratios (Good/Not good, Undervalued/Overvalued, or just OK) based on the given industry averages. Write the answers in the spaces provided.
|
Ratios |
Annual Data |
Industry Average |
Interpretation |
|
Current |
5.7 |
4 |
|
|
Days Sales Outstanding |
37 days |
42 days |
|
|
Total Debt to Total Capital |
47.80% |
32.60% |
|
|
Times-Interest Earned |
2.2 |
6 |
|
|
Profit Margin |
6.10% |
6.00% |
|
|
|
10.03% |
10.00% |
|
|
Enterprise Value to EBITDA |
0.87 |
1.12 |
|
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- Ratios Analyses: McCormick Refer to the information for McCormick above. Additional information for 20X3 it as follows (amounts in millions): Required: Next Level Compute the following for 20X3. Provide a brief description of what each ratio reveals about McCormick 1. return on common equity 2. debt-to-assets 3. debt-toequity 4. current 5. quick (McCormick uses cash and equivalents, short-term securities and receivables in their quick ratio calculation.) 6. inventory turnover days 7. accounts receivable turnover days 8. accounts payable turnover days 9. operating cycle (in days) 10. total asset turnover Use the following information for 14-17 and 14-18: The Hershey Company is one of the worlds leading producers of chocolates, candies, and confections. It sells chocolates and candies, mints and gums, baking ingredients, toppings, and beverages. Hersheys consolidated balance sheets for 20X2 and 20X3 follow.Juroe Company provided the following income statement for last year: Juroes balance sheet as of December 31 last year showed total liabilities of 10,250,000, total equity of 6,150,000, and total assets of 16,400,000. Required: 1. Calculate the return on sales. (Note: Round the percent to two decimal places.) 2. CONCEPTUAL CONNECTION Briefly explain the meaning of the return on sales ratio, and comment on whether Juroes return on sales ratio appears appropriate.Measures of liquidity, solvency, and profitability The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was 82.60 on December 31, 20Y2. Instructions Determine the following measures for 20Y2 (round to one decimal place, including percentages, except for per-share amounts): 1. Working capital 2. Current ratio 3. Quick ratio 4. Accounts receivable turnover 5. Number of days sales in receivables 6. Inventory turnover 7. Number of days sales in inventory 8. Ratio of fixed assets to long-term liabilities 9. Ratio of liabilities to stockholders equity 10. Times interest earned 11. Asset turnover 12. Return on total assets 13. Return on stockholders equity 14. Return on common stockholders equity 15. Earnings per share on common stock 16. Price-earnings ratio 17. Dividends per share of common stock 18. Dividend yield
- Measures of liquidity, solvency, and profitability The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was 82.60 on December 31, 20Y2. Instructions Determine the following measures for 20Y2, rounding to one decimal place, including percentages, except for per-share amounts: 1. Working capital 2. Current ratio 3. Quick ratio 4. Accounts receivable turnover 5. Number of days sales in receivables 6. Inventory turnover 7. Number of days sales in inventory 8. Ratio of fixed assets to long-term liabilities 9. Ratio of liabilities to stockholders equity 10. Times interest earned 11. Asset turnover 12. Return on total assets 13. Return on stockholders equity 14. Return on common stockholders equity 15. Earnings per share on common stock 16. Price-earnings ratio 17. Dividends per share of common stock 18. Dividend yieldAnalyze the following ratios (Good/Not good, Undervalued/Overvalued, or just OK) based on the given industry averages. Ratios Annual Data Industry Average Interpretation Current 5.7 4 Days Sales Outstanding 37 days 42 days Total Debt to Total Capital 47.80% 32.60% Times-Interest Earned 2.2 6 Profit Margin 6.10% 6.00% Return on Invested Capital 10.03% 10.00% Enterprise Value to EBITDA 0.87 1.12 Provide a decision for each analysis.Analyze the following ratios (Good/Not good, Undervalued/Overvalued, or just OK) based on the given industry averages. Write the answers in the spaces provided. Ratios Annual Data Industry Average Interpretation Current 5.7 4 Days Sales Outstanding 37 days 42 days Total Debt to Total Capital 47.80% 32.60% Times-Interest Earned 2.2 6 Profit Margin 6.10% 6.00% Return on Invested Capital 10.03% 10.00% Enterprise Value to EBITDA 0.87 1.12 Provide a decision for each analysis.
- 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.5. Profitability ratios Profitability ratios help in the analysis of the combined impact of liquidity ratios, asset management ratios, and debt management ratios on the operating performance of a firm. Your boss has asked you to calculate the profitability ratios of Diusitech Inc. and make comments on its second-year performance as compared with its first-year performance. The following shows Diusitech Inc.'s income statement for the last two years. The company had assets of $4,700 million in the first year and $7,518 million in the second year. Common equity was equal to $2,500 million in the first year, and the company distributed 100% of its earnings out as dividends during the first and the second years. In addition, the firm did not issue new stock during either year. Diusitech Inc. Income Statement For the Year Ending on December 31 (Millions of dollars) Year 2 Year 1 2,540 2,000 1,610 1,495 127 80 1,737 803 80 723 181 542 Net Sales Operating costs except depreciation and…a. Perform a Du Pont analysis on Green Valley. Assume that the industry average ratios are as follows: Total margin 3.5% Total asset turnover 1.5 Equity multiplier 2.5 Return on equity (ROE) 13.1% b. Calculate and interpret the following ratios: Industry Average Return on assets (ROA) Current ratio 5.2% 2.0 Days cash on hand 22 days Average collection period 19 days Debt ratio 71% Debt-to-equity ratio 2.5 Times interest earned (TIE) ratio 2.6 Fixed asset turnover ratio 1.4 c. Assume that there are 10,000 shares of Green Valley's stock outstanding and that some recently sold for $45 per share. • What is the firm's price/earnings ratio? What is its market/book ratio? (Hint: These ratios are discussed in the supplement to this chapter.)
- Using the ratios below, summarize the financial performance of the company. LIQUIDITY RATIOS Current Ratio (times) 1.75 Quick Ratio (times) 0.52 Average Payment Period (days) 28.31 Days ASSET MANAGEMENT RATIOS Total Asset Turnover (times) 2.90 Average Collection Period (days) 24 Days Inventory Turnover (times) 5.70 FINANCIAL LEVERAGE RATIOS Total Debt to Total Assets 0.37% Equity Multiplier (times) 1.59 PROFITABILITY RATIOS Operating Profit Margin 5.66% Net Profit Margin 3.55% Return on Total Assets 16.57% Return on Equity 16.36% Earnings per Share $0.99Find the following financial ratios for LVMH Moet Hennessy Louis Vuitton SA (use year-end figures rather than average values where appropriate) (Round your answers to 2 decimal places (e.g., 32.16).) : 2015 2016 Short-term solvency ratios: Current ratio Quick ratio Cash ratio Asset utilization ratios: Total asset turnover Inventory turnover Receivables turnover Long-term solvency ratios: Total debt ratio Debt–equity ratio Equity multiplier Times interest earned ratio Profitability ratios: Profit margin % % Return on assets % % Return on equity % %Ratio Industry Ratios GnG Ratios 1. Current Ratio 5.3 2. Acid Test Ratio 5.1 3. Gross Profit Ratio 30% 4. Net Income Margin 7.5% 5. Receivable Turnover Ratio 9 6. Return on Asset Ratio 12% 7. Debt to Asset Ratio 1:4 Interpretation and verbal analysis compared to industry ratios: 1. Liquidity 2. Profitability 3. Solvency Computations:
