Brock Inc. is a steel fabricating company operating in southern Ontario. Ratio analysis for Brock Inc. for the three most recent years along with comparative industry ratios are as follows: Brock Inc. Selected financial ratios Industry 2021 2020 2019 average Year-end stock price Annual dividend per share Number of shares outstanding $9.75 $0.25 100,000 $13.85 $0.25 100,000 $12.25 $0.25 100,000 Liquidity: Current ratio 1.80 1.95 2.15 2.12 Quick ratio 0.80 0.95 1.10 1.15 Leverage ratios: Current liabilities + total assets 40.42% 37.25% 35.55% 20.00% 20.75% 61.17% Long-term debt + total assets 19.97% 18.60% 25.00% Total debt + total assets 57.22% 54.15% 45.00% Equity + total assets Interest coverage (times interest earned) 38.83% 42.78% 45.85% 55.00% 8.00 8.50 10.40 11.10 Activity ratios: Receivables turnover 8.85 9.22 9.85 10.20 35.80 Average collection period Inventory turnover Total asset turnover 41.20 39.60 37.10 5.80 6.10 7.20 7.20 3.20 3.80 4.20 4.40 Profitability ratios: Gross margin Profit margin Return on assets (DuPont) Return on equity 32.65% 33.00% 32.50% 33.00% 6.65% 8.23% 34.57% 7.25% 8.30% 21.28% 27.55% 36.50% 33.52% 36.85% 40.82% Market ratios: Price-earnings ratio Earnings per share Payout ratio Dividend yield 13.36 18.22 14.94 15.25 $0.73 $0.76 $0.82 0.34 0.33 0.30 0.40 2.22% 1.81% 2.04% 3.20%
Brock Inc. is a steel fabricating company operating in southern Ontario. Ratio analysis for Brock Inc. for the three most recent years along with comparative industry ratios are as follows: Brock Inc. Selected financial ratios Industry 2021 2020 2019 average Year-end stock price Annual dividend per share Number of shares outstanding $9.75 $0.25 100,000 $13.85 $0.25 100,000 $12.25 $0.25 100,000 Liquidity: Current ratio 1.80 1.95 2.15 2.12 Quick ratio 0.80 0.95 1.10 1.15 Leverage ratios: Current liabilities + total assets 40.42% 37.25% 35.55% 20.00% 20.75% 61.17% Long-term debt + total assets 19.97% 18.60% 25.00% Total debt + total assets 57.22% 54.15% 45.00% Equity + total assets Interest coverage (times interest earned) 38.83% 42.78% 45.85% 55.00% 8.00 8.50 10.40 11.10 Activity ratios: Receivables turnover 8.85 9.22 9.85 10.20 35.80 Average collection period Inventory turnover Total asset turnover 41.20 39.60 37.10 5.80 6.10 7.20 7.20 3.20 3.80 4.20 4.40 Profitability ratios: Gross margin Profit margin Return on assets (DuPont) Return on equity 32.65% 33.00% 32.50% 33.00% 6.65% 8.23% 34.57% 7.25% 8.30% 21.28% 27.55% 36.50% 33.52% 36.85% 40.82% Market ratios: Price-earnings ratio Earnings per share Payout ratio Dividend yield 13.36 18.22 14.94 15.25 $0.73 $0.76 $0.82 0.34 0.33 0.30 0.40 2.22% 1.81% 2.04% 3.20%
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
Related questions
Question
Pls solve fast pls accurate and fast pls pls both sub parts
Transcribed Image Text:Brock Inc. is a steel fabricating company operating in southern Ontario. Ratio analysis
for Brock Inc. for the three most recent years along with comparative industry ratios are
as follows:
Brock Inc.
Selected financial ratios
Industry
2021
2020
2019
average
Year-end stock price
Annual dividend per share
Number of shares outstanding
$9.75
$13.85
$0.25
$0.25
100,000 100,000
$12.25
$0.25
100,000
Liquidity:
Current ratio
1.80
1.95
2.15
2.12
Quick ratio
0.80
0.95
1.10
1.15
Leverage ratios:
Current liabilities + total assets
40.42%
37.25%
35.55%
20.00%
Long-term debt + total assets
Total debt + total assets
20.75%
19.97%
18.60%
25.00%
61.17%
57.22%
54.15%
45.00%
Equity + total assets
Interest coverage (times
interest earned)
38.83%
42.78%
45.85%
55.00%
8.00
8.50
10.40
11.10
Activity ratios:
Receivables turnover
8.85
9.22
9.85
10.20
Average collection period
Inventory turnover
41.20
39.60
37.10
35.80
5.80
6.10
7.20
7.20
Total asset turnover
3.20
3.80
4.20
4.40
Profitability ratios:
Gross margin
Profit margin
Return on assets (DuPont)
Return on equity
32.65%
33.00%
32.50%
33.00%
6.65%
7.25%
8.23%
8.30%
27.55%
36.85%
21.28%
34.57%
36.50%
33.52%
40.82%
Market ratios:
Price-earnings ratio
Earnings per share
Payout ratio
Dividend yield
13.36
18.22
14.94
15.25
$0.73
$0.76
$0.82
0.40
3.20%
0.34
0.33
0.30
2.22%
1.81%
2.04%
Transcribed Image Text:Required:
a) Based on the ratio analysis and considering each major category of ratios, comment
on the financial health of Brock Inc. (calculations are NOT required).
b) Provide two possible courses of action that Brock Inc. could undertake to improve its
financial situation.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education