13 separate significant ratios into four primary categories

13 separate significant ratios into four primary categories...

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Unformatted text preview: 13 separ ate significant r at ios into four pr ima ry c ategories. GOODYEAR CALENDAR COMPANY P rofitabil ity Ratios 1. Profit Margin Net income/Sales………………………………….$168,000/$2,000,000= .084 or 8.4% 2. Return on Assets Net income/Total Assets…………………………$168,000/$760,000= .22105 or 22.11% 3. Return on Equity Net Income/Stockholder’s Equity…………… $168,000/$480,000= .35 or 35% ASSET UTILIZATION RATIOS 4. Receivables Turnover Sales (credit)/Receivables……………………….$2,000,000/$120,000= 16.67 16.67 times 5. Average Collection Period Accounts Receivable/Average Daily Credit Sales 120,000 divided by 2,000,000/360= 5555.5555= 120,000/5555.55= 21.6 days 6. Inventory Turnover Sales/Inventory……………………………………..$2,000,000/180,000= 11.111 11.111 Times 7. Fixed Asset Turnover Sales/Fixed Assets…………………………………….$2,000,000/$450,000= 4.44 44. Times 8. Total Asset Turnover Sales/Total Assets……………………………………..$2,000,000/$760,000= 2.63 2.63 DEBT UTILIZATION RATIOS 9. Current Ratio Current Assets/Current Liabilities………………..$370,000/$110,000= 3.36 3.36 10. Quick Ratio Current Assets-Inventory/Current Liabilities……….. $370,000-$180,000/$110,000……………….= $190,000/$110,000 = 1.727 or 1.73 11. Debt to Total Assets TotalDebt/TotalAssets……………………………..$280,000/$760,000= .3684 36.84% 12. Times Interest Earned…………………………$300,000/$20,000= 15 Times 15 times 13. Fixed Change Coverage Income before taxes and fixed charges/fixed charges…………….280,000/20,000 14 times ...
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This note was uploaded on 10/21/2010 for the course ECO 212 AACL0RVXH3 taught by Professor Shivers during the Spring '10 term at University of Phoenix.

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13 separate significant ratios into four primary categories...

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