Ch_03_HW_A_Solutions - Ch 03 HW A Solutions 1 Current Ratio...

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1 Ch 03 HW A Solutions 1. Current Ratio = Current Assets / Current Liabilities PY: 113,245 / 166,435 = 0.680415778 0.68 times 2. Quick Ratio = (Current Assets – Inventory) / Current Liabilities PY: ( 113,245 47,789 ) / 166,435 = 0.393282663 0.39 times 3. Cash Ratio = Cash / Current Liabilities CY: $11,187 / 176,775 = 0.063283835 0.06 times 4. Total Asset Turnover = Sales / Total Assets CY: $520,000 / $530,627 = 0.979972749 0.98 times 5. Inventory Turnover = Cost of Goods Sold / Inventory CY: 340,000 / 47,655 = 7.134613367 7.13 times 6. Receivables Turnover = Sales / Accounts Receivable CY: $520,000 / 56,786 = 9.157186631 9.16 times 7. Total Debt Ratio = Total Debt / Total Assets Total Debt = Current Liabilities + Long Term Debt PY: ( 166,435 + 120,000 ) / $518,933 = 0.551969137 0.55 times 8. Debt - Equity Ratio = Total Debt / Total Equity PY: ( 166,435 + 120,000 ) / 232,498 = 1.231989092 1.23 times 9. Equity Multiplier = Total Assets / Total Equity = 1 + (Debt - Equity Ratio) PY: $518,933 / 232,498 = 2.231989092 2.23 times 1 + ( Debt - Equity Ratio) 1 + 1.231989092 2.23 times 10. Times Interest Earned = EBIT / Interest Expense CY: 120,000 / 22,583 = 5.313731568 5.31 times 11. Cash Coverage Ratio = (EBIT + Depreciation) / Interest Expense CY: ( 120,000 + 60,000 ) / 22,583 = 7.970597352 7.97 times
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2 12. Profit Margin = Net Income / Sales CY: $53,579 / $520,000 = 0.103037212 10.30% 13. Return on Assets (ROA) = Net Income / Total Assets CY: $53,579 / $530,627 = 0.100973659
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