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=
=
151 , +;< I
==? , )11 I 1)) , :)+ I
s liabilitie *urrent
'nventory $ assets *urrent
ratio Duick
1?
5;. +olution0
*urrent assets H I;+,=1+ P I151,??? PI++1,)); H I<5=,11?
*urrent liabilities H I1:=,55+
3.56 =
=
=
55+ , 1:= I
11? , <5= I
s liabilitie *urrent
assets *urrent
ratio *urrent
5<. +olution0
*urrent ratio H 1.=)
*urrent liabilities H I);),=+1
'nventory H I1=;,+++
I5)1,?++ I);),=+1 1.=) assets *urrent
liabilites *urrent
assets *urrent
=) . 1
liabilites *urrent
assets *urrent
ratio *urrent
= =
=
=
3.74 =
=
=
=+1 , );) I
+++ , 1=; I ?++ , 5)1 I
s liabilitie *urrent
'nventory $ assets *urrent
ratio Duick
5=. +olution0
11
.et Q represent the additional borrowing against the firms line of credit @which also
e-uals the addition to current assetsA. Be can solve for that level of Q that forces the
firms current ratio to be at 1.;5
I+,5??,??? *urrent liabilities H ).1
*urrent liabilities H I1,:::,::;
1.;5 H @I+,5??,??? P QA @I1,:::,::; P QA
@1.;5 R I1,:::,::;A P 1.;5Q H I+,5??,??? P Q
?.;5Q H I+,5??,??? $ I),=1:,::;
Q H I;;;,;;;
:?. +olution0
Accounts receivables H I:51,<?+
Eet sales H I1,=+),+1=
times 7.89 =
=
=
<?+ , :51 I
+1= , =+) , 1 I
s receivable Accounts
sales Eet
turnover s receivable Accounts
:1. +olution0
1)
Accounts receivables turnover H +.=x
Eet sales H I+,1+:,<1)
:553,764 = =
=
=
= . +
<1) , 1+: , + I
s receivable Accounts
s receivable Accounts
<1) , 1+: , + I
x = . +
s receivable Accounts
sales Eet
turnover s receivable Accounts
:). +olution0
Sales H I<++,5<;
Mross profit margin H +).1O
'nventory H I1;<,1+5
6.3;x =
= =
=
=
=
=
1+5 , 1;< I
5?: , 5:+ I
'nventory
sold goods of *ost
ratio turnover 'nventory
5?: , 5:+ I
A 5<; , <++ +)1 . ? @ 5<; , <++ sold goods of *ost
<++,5<;
Sold goods of *ost 5<; , <++
+)1 . ?
Sales
sold goods of *ost $ Sales
margin profit Mross
:+. +olution0
days ;9.7 = =
5.:
+:5
inventory in sales s S 3ay
1+
:1. +olution0
Eet sales H I;1),1;<
Accounts receivables H I1:;,1+5
. times ): . 1
1+5 , 1:; I
1;< , ;1) I
receivable Accounts
sales Eet
turnover receivable Accounts
= =
=
days :59.< =
=
=
=
): . 1
+:5
turnover s receivable Accounts
+:5
recievable unts salesAcco Eet
+:5
3S4
:5. +olution0
:7,4<4,99< =
=
=
=
A )1? , +11 , : I :;+ . ? @ )1? , +11 , : I sold goods of *ost
I:,+11,)1?
Sold Moods of *ost )1? , +11 , : I
:;+ . ?
Sales
sold goods of *ost $ Sales
margin profit Mross
::. +olution0
11
Sales H I=,;15,=)+% 'nventory H I),)+;,1+5 *ash H ;55,?;1%
3S4 H 1= 3ays
;= . +5: , +?< , 1 I
+:5
=)+ , ;15 , = I 1=
+:5
sales Eet 3S4
s recievable Accounts
sales Eet
s receivable +:5
receivable unts salesAcco Eet
+:5
turnover receivable Accounts
+:5
3S4
=
=
= =
Accounts
DSO
6 :6<6,53;.7 -
: I=+1,51?.5 $ .;= I1,+?<,+5: s receivable
5: . 51? , =+1 I
+:5
=)+ , ;15 , = +5
+:5
sales Eet 3S4
s receivable accounts Eew
3ays +5 3S4 2arget
=
=
=
=
Accounts
:;. +olution0
'nterest expense H I+,+5?,??? x ?.?:<;5 H I)+?,+1).5?
times 3)
5? . +1) , )+? I
??= , ;:: , ) I
expense 'nterest
/8'2
earned interest 2imes
=
= =
:<. +olution0
3epreciation H I1,1+1,5??
'nterest expenses H I:11,<??
/3'2 H I;,))1,:1+
15
times 34.39 =
+
=
+
= =
<?? , :11 I
5?? , 1+1 , 1 I :1+ , ))1 , ; I
expense t 'nteres
on 3epreciati /8'2
expense 'nterest
/8'23A
rates coverage *ash
:=. +olution0
3epreciation H I:+?,;15
'nterest expenses H I11),?;<
/3'2H I1,51),<++
times 36.5 =
= =
?;< , 11) I
<++ , 51) , 1 I
expense 'nterest
/8'2
earned interest 2imes
times 38.4 =
+
=
+
= =
?;< , 11) I
;15 , :+? I <++ , 51) , 1 I
expense t 'nteres
on 3epreciati /8'2
expense 'nterest
/8'23A
rates coverage *ash
;?. +olution0
/-uity multiplier H 1 P 3ebt to e-uity
3ebt to e-uity H /-uity multiplier T1
H ).1; T 1
H 3.4<
1:
;1. +olution0
535 3.
15 . ? 1
1
assets 3ebt2otal 1
1
assets 2otal /-uity
1
/-uity
assets 2otal
multiplier /-uity
=
=
= =
;). +olution0
3ebt ratio H I1,)++,<+; I),1;<,==? H ?.5;
3.66
7.66
= =
=
+ =
=
=
= =
1 $ ).++
1 $ multiplier /-uity ratio e-uity 3ebt to
e-uityA @3ebt to 1 multiplier /-uity
5; . ? 1
1
assets 3ebt2otal 1
1
assets 2otal /-uity
1
/-uity
assets 2otal
multiplier /-uity
;+. +olution0
Eet income H I<1),1)5
Share price H I1+.15
/0S H I<1),1)5 +1), 1=? H I).:?
1;
times 9 1; .
:? . ) I
I1+.15
ratio earnings $ 0rice = =
;1. +olution0
Eet income H I1,);:,+51
Share outstandingH 1)?,???
/0S H I1,);:,+51 1)?,??? H I+.?1
0$/ ratio H 11.) times
:64.49 = =
=
=
I+.?1 11.) share per ice 0r
I+.?1
share per 0rice
) . 11
/0S
share per 0rice
ratio earnings 0rice
;5. +olution0
2otal assetsH I1,;11,)<<% 2otal debtH I),=1),???
Eet salesH I;,)1),1:5% Eet profit marginH 1<O
:3,785,744 =
=
=
1:5 , )1) , ; I 1< . ? income Eet
Sales
income Eet
margin profit Eet
7<.4= = = =
)<< , ;11 , 1 I
)11 , )=< , 1 I
assets 2otal
income Eet
,4A
1<
;:. +olution0
2otal assets turnover H ).<=
,4A H 1?.;1O
,4/ H )?.+:O
,4A H 0rofit margin x 2otal assets turnover
6.<= = = = =
<= . )
1?;1 . ?
turnover assets 2otoal
,4A
margin 0rofit
,4/ H ,4A x /-uity multiplier
3.84 = = =
1?;1 . ?
)?+: . ?
,4A
,4/
multiplier /-uity
;;. +olution0
Eet sales H I1,15:,;??
Eet income H I;;<,+)1
*ost of goods sold H I),;15,++1
/8'2 H I1,+5:,?=<
64.;<9<= =
=
=
;?? , 15: , 1 I
++1 , ;15 , ) I ;?? , 15: , 1 I
sales Eet
sold goods of *ost $ sales Eet
margin profit Mross
67.;746= = = =
;?? , 15: , 1 I
?=< , +5: , 1 I
sales Eet
/8'2
margin profit 4perating
1=
;<. +olution0
)?== . )
?.15)5
1
multiplier /-uity
?.15)5 ?.51;5 $ 1 ratio /-uity
51;5 . ?
)+5 , 1;< , 5 I
I),<+1,=5?
ratio 3ebt
= =
= =
= =
64.;5= =
=
=
=
=
)?== . ) 5=?1 . 1 ?=<; . ?
)) . )
)+5 , 1;< , 5 I
1)1 , )+1 , < I
1)1 , )+1 , < I
+55 , <1) I
/!
assets 2otal
Sales
Sales
income Eet
/! 2A24 0! ,4/
;=. +olution0
5) . 51< , ?1< , 1 I
).;
I),;5?,???
assets 2otal
assets 2otal
??? , ;5? , ) I
; . )
assets 2otal
??? , ;5? , ) I
assets 2otal
Sales
turnover assets 2otal
= =
=
= =
5?
1= . 5;: , 1?) I
5+ . )
51= , ?1< , 1 I
/-uity
/-uity
5) . 51< , ?1< , 1 I
5+ . )
/-uity
assets 2otal
/!
= =
=
=
:<9,753.54 =
=
=
=
5;; , 1?) I 1<; . ?
/-uity ,4/ income Eet
/-uity
income Eet
,4/
<?. +olution0
5 I1+,=<=,=; <=5 , 51) , 1 I 1 . + Sales
<=5 , 51) , 1 I
Sales
1 . +
assets 2otal
Sales
turnover assets 2otal
= =
=
=
5<< , =)< , 1 I
+1 . )
<=5 , 51) , 1 I
/-uity
/-uity
<=5 , 51) , 1 I
+1 . )
/-uity
assets 2otal
/!
= =
=
=
51
5?+ , ++; I
5<< , =)< , 1 I 1;5 . ?
/-uity ,4/ E'
/-uity
E'
,4/
=
=
=
=
<.45= = = =
<=5 , 51) , 1 I
5?+ , ++; I
assets 2otal
E'
,4A
5)