Week 2 Financial - 8 Total asset turnover = sales/total assets=2,000,000/760,000=2.63x Liquidity Ratios – 9 Current Ratio = current

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Cathy Bandelow CheckPoint: Week 2 Financial Ratios Profitability ratios. 1. Profit margin = net income/sales = 168,000/2,000,000= 0.05% 2. Return on assets (investment) = net income/total assets=168,000/760,000= 0.22% 3. Return on equity = net income/stockholder’s equity=168,000/480,000= 0.35% Asset Utilization Ratios – 4. Receivables Turnover = sales (credit)/receivables=2,000,000/120,000= 16.7x 5. Average collection period = accounts receivable/average daily credit sales=120,000/2,000,000= 166 days 6. Inventory turnover = sales/inventory=2,000,000/180,000=11x 7. Fixed asset turnover = sales/fixed assets=2,000,000/350,000=5.71x
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Unformatted text preview: 8. Total asset turnover = sales/total assets=2,000,000/760,000=2.63x Liquidity Ratios – 9. Current Ratio = current assets/current liabilities=370,000/110,000=3x 10. Quick Ratio = current assets – inventory/current liabilities=370,000-180,000/110,000=190,… Debt Utilization Ratios – 11. Debt to total assets = total debt/total assets=280,000/760,000=36.84% 12. Times interest earned = income before interest and taxes/interest=300,000/20,000=15x 13. Fixed charge coverage = income before fixed charges and taxes/fixed charges=300,000+30,000=$330,000 30,000+20,000=$50,000 300,000/50,000=6x...
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This note was uploaded on 01/19/2011 for the course FIN 200 FIN 200 taught by Professor Smith during the Fall '10 term at University of Phoenix.

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