For each ratio listed, identify whether the change in ratio value from the Prior Year to the Current Year is usually regarded asfavorable or unfavorable.RatioCurrent YearPrior YearChange1. Profit margin9%55 %7%54 %2. Debt ratio3. Gross margin36 %45 %4. Acid-test ratio5. Accounts receivable turnover6. Basic earnings per share1.201.235.06.3%241.201.087. Inventory turnover8. Dividend yield5.04.94.0 %3.8 %

Financial ratios help in judging the profitability, solvency, and activity of a business…

For each ratio listed, identify whether the change in ratio value from the Prior Year te favorable or unfavorable. Ratio Current Year Prior Year Change 1. Profit margin 9% 7% 54 % 2. Debt ratio 55 % 3. Gross margin 36 % 45 % 4. Acid-test ratio 1.20 1.23 5. Accounts receivable turnover 5.0 6.3 6. Basic earnings per share 1.20 $ 1.08 7. Inventory turnover 8. Dividend yield 5.0 4.9 4.0 % 3.8 % %24

For each ratio listed, identify whether the change in ratio value from the Prior Year te favorable or unfavorable. Ratio Current Year Prior Year Change 1. Profit margin 9% 7% 54 % 2. Debt ratio 55 % 3. Gross margin 36 % 45 % 4. Acid-test ratio 1.20 1.23 5. Accounts receivable turnover 5.0 6.3 6. Basic earnings per share 1.20 $ 1.08 7. Inventory turnover 8. Dividend yield 5.0 4.9 4.0 % 3.8 % %24

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Compare the Solvency, Liquidity and Profitability for the two companies
am.101.
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For each ratio listed, identify whether the change in ratio value from the Prior Year to the Current Year is usually regarded as favorable or unfavorable. Ratio 1. Profit margin 2. Debt ratio 3. Gross margin 4. Acid-test ratio 5. Accounts receivable turnover 6. Basic earnings per share 7. Inventory turnover 8. Dividend yield Current Year Prior Year Change 9% 8% 47 % 42 % 34 % 46 % 1.00 1.15 5.5 6.7 $ 1.25 $ 1.10 3.6 3.4 2.0 % 1.2 %