
Compute the given ratios for Company UO.

Answer to Problem 13.2CP
Compute the given ratios for Company UO.
Ratio | Formula | Calculation | Result |
Return on Equity (ROE) | 15.38% | ||
Earnings per share (EPS) | As given in income statement | $1.70 | |
Net profit margin | 7.00% | ||
Inventory turnover | 6.42 times | ||
Current ratio | 2.29 times | ||
Debt-to-equity ratio | 0.42 times | ||
Price/Earnings (P/E) ratio | 23.53 times | ||
Dividend yield ratio | 0%% |
Table (1)
Explanation of Solution
Return on equity ratio:
Return on equity of the Company UO is 15.38 %.
Earnings per share:
Earnings per share help to measure the profitability of a company. Earnings per share are the amount of profit that is allocated to each share of outstanding stock.
Earnings per share of the Company UO is $1.70
Profit margin:
Profit margin ratio is used to determine the percentage of net income that is being generated per dollar of revenue or sales.
Net profit margin of the Company is 7.00 %.
Inventory turnover ratio:
Inventory turnover ratio is used to determine the number of times inventory used or sold during the particular accounting period.
Inventory turnover ratio of the Company UO is 7.46%.
Current ratio is used to determine the relationship between current assets and current liabilities. The ideal current ratio is 2:1.
Current ratio of the Company UO is 2.29 times.
Debt-equity ratio:
The debt-to-equity ratio indicates that the company’s debt as a proportion of its stockholders’ equity.
Debt-to-Equity ratio of the Company UO is 0.42 times.
Price/Earnings Ratio: It depicts the relation of market price of a share to earnings per share of that company. The price/earnings ratio presents the market value of the amount invested to earn $1 by a company. It is major tool to be used by investors before the decisions related to investments in a company.
Price/Earnings ratio of the Company UO is 23.53 times.
Dividend yield: This is the ratio which measures the amount of dividends paid relative to the market price.
Dividend yield ratio of the Company UO is 0%%.
Want to see more full solutions like this?
Chapter 13 Solutions
Financial Accounting
- Anti-Pandemic Pharma Co. Ltd. reports the following information in its income statement: Sales = $5,250,000; Costs = $2,173,000; Other expenses = $187,400; Depreciation expense = $79,000; Interest expense= $53,555; Taxes = $76,000; Dividends = $69,000. $136,700 worth of new shares were also issued during the year and long-term debt worth $65,300 was redeemed. a) Compute the cash flow from assets b) Compute the net change in working capitalarrow_forwardAnswer the questions in the attached imagearrow_forwardAuditor should assess the likelihood of --------- when identifying potential criteria for the audit. material misstatement wrong answerarrow_forward
- When information comes to the auditors' attention indicating that ----- may have occured, auditors should evaluate whether the possible effect is significant within the context of the audit objectives.arrow_forwardNeed help with this question solution general accountingarrow_forwardSelect the correct answerarrow_forward
- What is a good response to this post? Hello everyone,The theory of facework is a beneficial instrument for preserving self-image and fostering mutual respect during exchanges. According to Nguyen-Phuong-Mai, Terlouw, and Pilot (2014), facework is the strategic approach individuals employ to validate their own identity while simultaneously considering the requirements of others. The necessity of these strategies has been evident to me during my nine years as a rideshare driver. I endeavor to understand the context and intentions of each passenger by dedicating sufficient time to attentive listening before disclosing undue personal information. This empathetic and respectful approach safeguards my identity and fosters trust, reducing the probability of rambling and mitigating the potential harm of receiving a poor rating.My experience in the restaurant industry, particularly at venues such as Tavern on the Green in New York City, has emphasized the significance of effective facework.…arrow_forwardCorrect answerarrow_forwardQuick answer of this general accounting questionarrow_forward
- College Accounting, Chapters 1-27AccountingISBN:9781337794756Author:HEINTZ, James A.Publisher:Cengage Learning,Managerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College PubFinancial And Managerial AccountingAccountingISBN:9781337902663Author:WARREN, Carl S.Publisher:Cengage Learning,
- EBK CONTEMPORARY FINANCIAL MANAGEMENTFinanceISBN:9781337514835Author:MOYERPublisher:CENGAGE LEARNING - CONSIGNMENTCentury 21 Accounting Multicolumn JournalAccountingISBN:9781337679503Author:GilbertsonPublisher:CengageExcel Applications for Accounting PrinciplesAccountingISBN:9781111581565Author:Gaylord N. SmithPublisher:Cengage Learning




