Analyze the following ratios (Good/Not good, Undervalued/Overvalued, or just OK) based on the given industry averages. Ratios Annual Data Industry Average Interpretation Current 5.7 4 Days Sales Outstanding 37 days 42 days Total Debt to Total Capital 47.80% 32.60% Times-Interest Earned 2.2 6 Profit Margin 6.10% 6.00% Return on Invested Capital 10.03% 10.00% Enterprise Value to EBITDA 0.87
Analyze the following ratios (Good/Not good, Undervalued/Overvalued, or just OK) based on the given industry averages. Ratios Annual Data Industry Average Interpretation Current 5.7 4 Days Sales Outstanding 37 days 42 days Total Debt to Total Capital 47.80% 32.60% Times-Interest Earned 2.2 6 Profit Margin 6.10% 6.00% Return on Invested Capital 10.03% 10.00% Enterprise Value to EBITDA 0.87
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Analyze the following ratios (Good/Not good, Undervalued/Overvalued, or just OK) based on the given industry averages.
Ratios |
Annual Data |
Industry Average |
Interpretation |
Current |
5.7 |
4 |
|
Days Sales Outstanding |
37 days |
42 days |
|
Total Debt to Total Capital |
47.80% |
32.60% |
|
Times-Interest Earned |
2.2 |
6 |
|
Profit Margin |
6.10% |
6.00% |
|
Return on Invested Capital |
10.03% |
10.00% |
|
Enterprise Value to EBITDA |
0.87 |
1.12 |
|
Provide a decision for each analysis.
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