based on the ratio analysis below will the company be successful after taking a 500.0 mil loan to regain the lead in the construction market and to expand its business to the sale of heavy equipment? or should the company sought other forms of financing? Analysis of Financial Data (Table with ratios)   Ratio Analysis 2021 Est. 2020 2019 Industry Average Liquidity Ratios         Current Ratio (times) 2.34  3.22  3.68 4.2 Quick Ratio (times)  0.91 1.24 1.79 2.1           Asset Management Ratios         Average sales/day  10.96 8.22 7.81 9 Inventory Turnover Ratio (times)  6.08  5.83  5.06 9 Days Sales Outstanding (days)  38.32  45.62  40.34 36 Fixed Assets Turnover Ratio (times)  2.12 2.52 3.27 3 Total Asset Turnover Ratio  1.32 1.37 1.69 1.8           Debt Management Ratios         Total Debt to Total Assets (%)  59.09 48.58 47.6 40 Times Interest Earned (times)  7.9 6.81 11 6 Debt to Equity Ratio (%)  1.49 0.98 0.95 1           Profitability Ratios         Profit Margin on Sales (%)  10.35  10.24  12.63 8 Earning Power (%)  26.08 27.39  39.2 17.2 Return on Total Assets (%)  13.67  14.02  21.43 12 Return on Common Equity (%)  34.52  28.29  42.86 25           Market Value Ratios Price/Earnings Ratio         Price/Earnings Ratio (times)  3.41  3.80  3.65 12.5 Price/Cash Flow Ratio (times)  2.69  2.85 2.91 6.8 Market /Book Value Ratio (times)  1.17  1.06 1.55 1.7

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
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based on the ratio analysis below will the company be successful after taking a 500.0 mil loan to regain the lead in the construction market and to expand its business to the sale of heavy equipment?

or should the company sought other forms of financing?

Analysis of Financial Data (Table with ratios)

 

Ratio Analysis

2021

Est.

2020

2019

Industry Average

Liquidity Ratios

 

 

 

 

Current Ratio (times)

2.34

 3.22

 3.68

4.2

Quick Ratio (times)

 0.91

1.24

1.79

2.1

 

 

 

 

 

Asset Management Ratios

 

 

 

 

Average sales/day

 10.96

8.22

7.81

9

Inventory Turnover Ratio (times)

 6.08

 5.83

 5.06

9

Days Sales Outstanding (days)

 38.32

 45.62

 40.34

36

Fixed Assets Turnover Ratio (times)

 2.12

2.52

3.27

3

Total Asset Turnover Ratio

 1.32

1.37

1.69

1.8

 

 

 

 

 

Debt Management Ratios

 

 

 

 

Total Debt to Total Assets (%)

 59.09

48.58

47.6

40

Times Interest Earned (times)

 7.9

6.81

11

6

Debt to Equity Ratio (%)

 1.49

0.98

0.95

1

 

 

 

 

 

Profitability Ratios

 

 

 

 

Profit Margin on Sales (%)

 10.35

 10.24

 12.63

8

Earning Power (%)

 26.08

27.39

 39.2

17.2

Return on Total Assets (%)

 13.67

 14.02

 21.43

12

Return on Common Equity (%)

 34.52

 28.29

 42.86

25

 

 

 

 

 

Market Value Ratios Price/Earnings Ratio

 

 

 

 

Price/Earnings Ratio (times)

 3.41

 3.80

 3.65

12.5

Price/Cash Flow Ratio (times)

 2.69

 2.85

2.91

6.8

Market /Book Value Ratio (times)

 1.17

 1.06

1.55

1.7

 

 

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