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

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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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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