FIN200 Week 2 CheckPoint Financial Ratios

FIN200 Week 2 CheckPoint Financial Ratios - Sales (on...

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FIN200 Week 2 CheckPoint Financial Ratios Goodyear Calendar Company Profitability ratios Profit margin = $168,000/$2,000,000 = 8.40% Return on assets (investment) = $168,000/$760,000 = 22.1% Return on equity = $168,000/$480,000 = 35% Assets utilization ratios Receivable turnover = $2,000,000/$120,000 = 16.66x Average collection period = $120,000/$5,555 = 21.6 days Inventory turnover = $2,000,000/$180,000 = 11.11x Fixed asset turnover = $2,000,000/$350,000 = 5.71x Total asset turnover = $2,000,000/$760,000 = 2.63x Liquidity ratio Current ratio = $370,000/$110,000 = 3.36x Quick ratio = $190,000/$110,000 = 1.72x Debt utilization ratios Debt to total assets = $280,000/$760,000 = 36.84% Times interest earned = $300,000/$20,000 = 15x Fixed charge coverage = $310,000/$30,000 = 10.33x Goodyear Calendar Company Income Statement For the Year Ending December 31, 2004
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Unformatted text preview: Sales (on credit). ................................................................ $2,000,000 Less: Cost of goods sold. ................................................. 1,300,000 Gross profit. ....................................................................... 700,000 Less: Selling and administrative expenses. ..................... 400,000 * Operating profit (EBIT). .................................................... 300,000 Less: Interest expense. ..................................................... 20,000 Earnings before taxes (EBT). ............................................ 280,000 Less: Taxes. ..................................................................... 112,000 Earnings after taxes (EAT). ............................................... $ 168,000 *Includes $10,000 in lease payments....
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