a. Calculate the following ratios. Do not round intermediate calculations. Round your answers to two decimal places. Firm Industry Average Current ratio Debt to total capital Times interest earned EBITDA coverage Inventory turnover Days sales outstanding Fixed assets turnover Total assets turnover Profit margin Return on total assets Return on common equity Return on invested capital Profit margin Total assets turnover Equity multiplier 2.93 x 0.27 % 9.55 x 12.09 x 4.56 x 33.14 days 5.06 x 1.77 x 4.33 % 7.66 % 10.52 % 9.85 % b. Construct a DuPont equation, and the industry. Do not round intermediate calculations. Round your answers to two decimal places. Firm % Industry. 3.75% X 3x 2x 15% 5x 10x 9x X -Select- 25days 6x 3x 3.75% 11.25% 15.70% 14.60% X c. Do the balance sheet accounts or the income statement figures seem to be primarily responsible for the low profits? I. Analysis of the extended Du Pont equation and the set of ratios shows that the turnover ratio of sales to assets is quite low; however, its profit margin compares favorably with the industry average. Either sales should be higher given the present level of assets, or the firm is carrying more assets than it needs to support its sales. II. Analysis of the extended Du Pont equation and the set of ratios shows that the turnover ratio of sales to assets is quite low; however, its profit margin compares favorably with the industry average. Either sales should be lower given the present level of assets, or the firm is carrying less assets than it needs to support its sales. III. Analysis of the extended Du Pont equation and the set of ratios shows that most of the Asset Management ratios are below the averages. Either assets should be higher given the present level of sales, or the firm is carrying less assets than it needs to support its sales. IV. The low ROE for the firm is due to the fact that the firm is utilizing more debt than the average firm in the industry and the low ROA is mainly a result of an excess investment in assets. V. The low ROE for the firm is due to the fact that the firm is utilizing less debt than the average firm in the industry and the low ROA is mainly a result of an lower than average investment in assets.
a. Calculate the following ratios. Do not round intermediate calculations. Round your answers to two decimal places. Firm Industry Average Current ratio Debt to total capital Times interest earned EBITDA coverage Inventory turnover Days sales outstanding Fixed assets turnover Total assets turnover Profit margin Return on total assets Return on common equity Return on invested capital Profit margin Total assets turnover Equity multiplier 2.93 x 0.27 % 9.55 x 12.09 x 4.56 x 33.14 days 5.06 x 1.77 x 4.33 % 7.66 % 10.52 % 9.85 % b. Construct a DuPont equation, and the industry. Do not round intermediate calculations. Round your answers to two decimal places. Firm % Industry. 3.75% X 3x 2x 15% 5x 10x 9x X -Select- 25days 6x 3x 3.75% 11.25% 15.70% 14.60% X c. Do the balance sheet accounts or the income statement figures seem to be primarily responsible for the low profits? I. Analysis of the extended Du Pont equation and the set of ratios shows that the turnover ratio of sales to assets is quite low; however, its profit margin compares favorably with the industry average. Either sales should be higher given the present level of assets, or the firm is carrying more assets than it needs to support its sales. II. Analysis of the extended Du Pont equation and the set of ratios shows that the turnover ratio of sales to assets is quite low; however, its profit margin compares favorably with the industry average. Either sales should be lower given the present level of assets, or the firm is carrying less assets than it needs to support its sales. III. Analysis of the extended Du Pont equation and the set of ratios shows that most of the Asset Management ratios are below the averages. Either assets should be higher given the present level of sales, or the firm is carrying less assets than it needs to support its sales. IV. The low ROE for the firm is due to the fact that the firm is utilizing more debt than the average firm in the industry and the low ROA is mainly a result of an excess investment in assets. V. The low ROE for the firm is due to the fact that the firm is utilizing less debt than the average firm in the industry and the low ROA is mainly a result of an lower than average investment in assets.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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