Profitability, Liquidity, and Solvency RatiosShannon Corporation gathered the following information from its financial statements:Net sales$180,000Net income25,200Current assets40,500Current liabilities27,000Total assets130,000Total liabilities97,500Using the above data, calculate the following: (1) profit margin, (2) current ratio, (3) debt-to-total assetsratio, and (4) return on assets ratio.Note: Round answers to one decimal place.Profit marginCurrent ratioDebt-to-total assets ratioReturn on assets ratio

Profit margin = Net income / Net sales = $25200/$180000 = 14% Current ratio = Current assets /…

Answered: Shannon Corporation gathered the…

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter3: Analysis Of Financial Statements

Section: Chapter Questions

Problem 8P: Assume you are given the following relationships for the Haslam Corporation: Calculate Haslam’s...

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Similar questions

Assume you are given the following relationships for the Haslam Corporation: Calculate Haslam’s profit margin and liabilities-to-assets ratio. Suppose half its liabilities are in the form of debt. Calculate the debt-to-assets ratio.
Define each of the following terms: Liquidity ratios: current ratio; quick, or acid test, ratio Asset management ratios: inventory turnover ratio; days sales outstanding (DSO); fixed assets turnover ratio; total assets turnover ratio Financial leverage ratios: debt ratio; times-interest-earned (TIE) ratio; EBITDA coverage ratio Profitability ratios: profit margin on sales; basic earning power (BEP) ratio; return on total assets (ROA); return on common equity (ROE) Market value ratios: price/earnings (P/E) ratio; price/cash flow ratio; market/book (M/B) ratio; book value per share Trend analysis; comparative ratio analysis; benchmarking DuPont equation; window dressing; seasonal effects on ratios
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 yield
ANALY SIS OF PROFITABILITY Based on the financial statement data in Exercise 24-1A, compute the following profitability measures for 20-2 (round all calculations to two decimal places): (a) Profit margin ratio (b) Return on assets (c) Return on common stockholders equity (d) Earnings per share of common stock
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.
Based upon the information given below, calculate the following: Current ratio Acid test Accounts receivable turnover ratio Cash ratio Inventory turnover EPS Total asset turnover Debt ratio Debt-to-equity ratio Times interest earned ROI Net profit margin ROE Market price/Book value P/E Average Collection Period BALANCE SHEET ASSETS LIABILITIES & STOCKHOLDERS EQUITY Cash $ 1,500 Accounts payable $12,500 Marketable securities 2,500 Notes payable 12,500 Accounts receivable 15,000 Total…
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 $0.99
Based upon the information given below, calculate the following: Current ratio Acid test Accounts receivable turnover ratio Cash ratio Inventory turnover EPS Total asset turnover Debt ratio Debt-to-equity ratio Times interest earned ROI Net profit margin ROE Market price/Book value P/E BALANCE SHEET ASSETS LIABILITIES & STOCKHOLDERS EQUITY Cash $ 1,500 Accounts payable $12,500 Marketable securities 2,500 Notes payable 12,500 Accounts receivable 15,000 Total current liabilities…
Select the Income Statements and Balance Sheets of Aramco Saudi from the calculate the following financial ratios: a. Long-term debt ratios b. Total debt ratio c. Times interest earned d. Cash coverage ration e. current ratio f. Quick ratio g. Operating profit margin h. Inventory Turnover i. Days in inventory j. Average collection period k. Return on equity I. Return on assets m. Payout rations
Below are financial ratios for XYZ Corporation and comparative ratios for XYZCorporations industry. The ratios for XYZ Corporation are computed usinginformation from its financial statements. XYZ Corporation:Current Ratio - 3.45, Return on assets - 31.4%, Gross Profit - 36%, Net Profit Margin - 8.2%, Fixed Asset Turnover - 15.3Industry Average:Current Ratio - 3.10, Return on assets - 30%, Gross Profit - 34.3%, Net Profit Margin - 8.0%, Fixed Asset Turnover - 15.55__________________________________________________________Required:Interpret the ratios of XYZ Corporation and draw conclusions about the company’sfinancial performance and financial condition with full knowledge of the industryratios.
Based upon the information given below, calculate the following: Cash ratio Inventory turnover EPS Total asset turnover Debt ratio Debt-to-equity ratio Times interest earned ROI Net profit margin ROE Market price/Book value P/E Average Collection Period BALANCE SHEET ASSETS LIABILITIES & STOCKHOLDERS EQUITY Cash $ 1,500 Accounts payable $12,500 Marketable securities 2,500 Notes payable 12,500 Accounts receivable 15,000 Total current liabilities $25,000 Inventory 33,000 Long-term…

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