A company has the following ratios: 2012 2013 Current ratio Debt ratio Cash coverage Inventory turns 2.4 0.6 5.6 3.2 2014 2.3 0.5 7.2 3.6 2.1 0.3 8.1 3.9 What is true of this company? a. Becoming more liquid evidenced by its cash coverage. b. Increasing its investment in inventory O c. Improving its ability to borrow d. Becoming less liquid as evidenced by its debt ratio

A company has the following ratios: 2012 2013 Current ratio Debt ratio Cash coverage Inventory turns 2.4 0.6 5.6 3.2 2014 2.3 0.5 7.2 3.6 2.1 0.3 8.1 3.9 What is true of this company? a. Becoming more liquid evidenced by its cash coverage. b. Increasing its investment in inventory O c. Improving its ability to borrow d. Becoming less liquid as evidenced by its debt ratio

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Liquidity Ratios Provide a brief definition of what liquidity ratios mean to the profitability of a company. What are the differences between Samsung and Apple in relationship to each of the ratios? What do the ratios mean to the company’s profitability? Is it good or bad?
Whats the equation to find current ratio when current assets isnt given? Also how do you find debit to equity ratio in this kind of problem?
Calculate the Rate of Return on Assets (ROA) for 2011. Disaggregate ROA into the profit margin for ROA and total assets turnover components. Calculate the Rate of Return on Common Stockholders’ Equity (ROCE) for 2011. Disaggregate ROCE into the profit margin for ROCE, total assets turnover and capital structure leverage components.
Need to calculate for "THE YEAR" *2013* this ratio: •current ratio •quick ratio •cash ratio •total debt ratio •times interested ratio •fixed assets turnover ratio •inventory turnover •net profit margin •return on total assets •return on stockholders equity balance sheet 2013 assets cash 44,494,000 short term investment 4,531,000 net receivable 12,948,000 inventory ------- other current assets 1,310,000 ______________________________________ total current assets 23,283,00 long term investment 4,971,000 PPE 2,760,000 Goodwill 9,267,000 intangible assets 941,000 Accumulated amortization ------------ other assets 266,000 deferred long term assets charge ------- __________________________ total assets 41,488,000 liabilities current liabilities accounts payable 3,215,000 short/current long term debt 9,266,000 other current liabilities 158,000 ________________- total current liabilities 12,639,000 Long term debt 4,117,000 other liabilities 244,000 deferred long term liability charge 841,000…
Based on this analysis how would I assess the financial stability and operational efficiency of this company? Ratio and Ratio Formula (in thousands) 2015 2014 2013 Current Industry Average Liquidity Current Ratio =Current Asset / Current Liability 9,900/6,300 1.57 1.61 1.62 1.63 Acid Test Ratio or Quick Ratio = (Cash + Marketable securities + Accounts receivable)/Current liabilities (400+300+3,200)/6,300 0.62 0.64 0.63 0.68 Solvency Times Interest Earned =Earnings before interest & taxes/interest expense, gross (7,060+900)/900 8.84 8.55 8.5 8.45 Profitability Profit margin on sales = net income/sales 7,060/30,500 14% 13.20% 12.10% 13.00% Productivity Asset turnover = sales/avg total assets 30,500/6,000+5,400)/2) 1.85 1.84 1.83 1.84 Inventory turnover = COGS/avg inv 17,600/ (6,000+5,400)/2) 3.09 3.17 3.21 3.18
Based on the forecast how much additional financing is needed?
None
Company Comparison Tesla GM Ford Toyota Current Ratio 1.24 1.07 1.16 1.04 Total asset 0.77 0.60 0.60 0.59 turnover ratio Debt ratio 0.80 0.81 1.92 4.83 Gross profit 16.55% 10.18% 13.60% 10.01% margin P/E ratio N/A 8.15 N/A 7.81 The company with the best debt ratio, P/E ratio, and total asset turnover ratio is: Select one: O a. GM O b. Ford ○ c. Toyota O d. Tesla

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