Annex 1

Ratio
Measuring ability to pay current liabilities
1. Current Ratio
2. Acid-test (Quick) Ratio
Measuring ability to sell inventory and collect receivables
3. Inventory Turnover
4. Accounts Receivable Turnover
5. Days sale in receivables
Measuring ability to pay long-term debt
6. Debt Ratio
7. Times-interest-earned ratio
Measuring profitability
8. Rate of return on net sales
9. Rate of return on total assets
10. Rate of return on common stockholders equity
11. Earnings per share of common stock
Analyzing stock as an investment
12. Price/ earnings ratio
13. Dividend yield
14. Book value per share of common stock

Computation of Ratios
Company Name:
Year:
Formula

Current Assets / Current Liabilities

Cash + STI + Net Current Receivables / Current Liabilities

Cost of goods sold / Average Inventory

Net Credit Sales / Average Net Account Receivables
Average Net Accounts Receivables / One Days Sales

Total Liabilities / Total Assets

Income from Operations / Interest Expense

Net Income / Net Sales

Net Income + Interest Expense / Average Total Assets
Net Income - Preferred Dividends / Average Common Stockholders Equity
Net Income - Preferred Dividends / No. of Common Shares Outstanding

Market Price Per Share / Earnings Per Share

Annual Dividends Per Share / Market Price Per Share
Total SHE- Preferred equity / No. of Common Shares Outstanding

Mitsubishi
2012
Computation

Result

759,175 / 703, 457

1.08

310,993 + 146,182 + 26,713 + 8,990 / 703,457

0.7

1,487,267 / (189,286 + 187,462 / 2)

7.9

1,807,293 / (114,432 + 146,182 / 2)

13.9

130, 307 / 4,951

26 days

1,055,686 / 1,321, 306

.80

63, 674 / 13,706

4.65

23,928 / 1,807, 293

0.013

23,928 + 13,706 / (1,312,511 + 1,321,306 / 2)

0.03

23,928 - 50,000 / (145,180 + 121,009)

-0.20

23,928 - 50,000 / 5,537

-4.71

Y1,840 / -4.71

-390.66

6/ Y1,840

0.003

145,180/ 5,537

26.22

Interpretation
Mitsibishi has Y1.08 current assets to pay Y1 of current liability. This is good.
Mitsubishi has Y0.70 of assets to pay Y1 of current liabilities. This is a weak position.

Mitsubishi sold inventory 7.9 times per year. This is bad since it has decreased from last year's ratio.
Mitsubishi's receivable turnover of 13.9 is good but it decreased compared to last year's 15.5.
It takes Mitsubishi 26 days to collect its accounts receivable. This is good.
Mitsubishi owes Y.80 for every Y1 in total assets. This borders on high risk.
Mitsubishi appears to have little difficulty servicing its debt.
For each sales dollar, Mitsubishi earned .013 as net income. This is better.
For every Y1 of asset invested, Mitsubishi earned .03. This is good.
For every Y1 invested by common stockholders, Mitsubishi lost 0.20. This is bad.
For each share of the company's outstanding common stock, Mitsubishi lost 4.71. This is bad.
This is bad because Mitsubishi got negative for the P/E ratio.
The industry is paying this annually.
This is good because to the investors, the lower the ratio, the more attractive the stock.

Annex 3:

Ratio
Measuring ability to pay current liabilities
1. Current Ratio
2. Acid-test (Quick) Ratio
Measuring ability to sell inventory and collect receivables
3. Inventory turnover
4. Accounts receivable turnover
5. Days' sale in receivables
Measuring ability to pay long-term debt
6. Debt Ratio
7. Times-interest-earned ratio
Measuring profitability
8. Rate of return on net sales
9. Rate of return on total assets
10. Rate of return on common stockholders' equity
11. Earnings (Loss) per share of common stock
Analyzing stock as an investment
12. Price/ earnings ratio
13. Dividend Yield
14. Book value per share of common stock

Computation of Ratios
Company Name:
Year:
Formula
Current Assets / Current Liabilities
Cash + STI + Net Current Receivables / Current Liabilities

Cost of goods sold / Average inventory

Net Credit Sales / Ave net accounts receivable
Ave net accounts receivable / One day's sales
Total liabilities / Total assets
Income from operations / Interest expense
Net Income / Net Sales
Net income + Interest expense / Ave total assets
Net Income - Preferred Dividends / Ave common stockholders' equity
Net income - Preferred Dividends / No. of shares of common stock outstanding
Market price per share of common stock / earnings per share
Annual div per share of common (or preferred) stock / MPS of common (or preferred) stock
Total SHE - Preferred equity / No. of shares of common stock outstanding

Ford
2012
Computation

Result

142,094 / 68,715

2.07

(15,659 + 20,284 + 71,510 + 10,828) /

68,715

1.72

112,578 / (7,362 + 5,901 / 2)

16.97

134,252 / (71,510 + 69,976 / 2)

70,743 / 368
174,243 / 190,554

1.9
192 days
0.91 or 91%

121,584 / 3,828

39.03

5,665 / 134,252

0.04 or 4%

5,665 + 3,828 / (190,554 + 178,348 / 2)

0.05 or 5%

5,665 / (15,989 + 15,071/2)

0.36

5,665 / 3,875

1.46

10.42 / 1.46

7.14

.05 / 10.42

0.005
4.13

15,989 / 3,875

Interpretation
Ford has P2.07 of current assets to pay P1 of current liability. They have sufficient current assets.
The companys ratio is significanttly better than the industry average.

This is good because it means that the company was able to turnover their goods at least 4 times each season. Also, Fords In

1.9 is low for a company like Ford, but given the fact that they sell cars, their receivables turnover is enough. This can still be

Similar to the one stated above, it is alright that their days sale in receivables takes 192 days because they are a car compan
Fords debt ratio is 91% meaning almost all their assets are supported through loans. They are in a high-risk position.
Fords 39.03 ratio suggests ease in paying its interest expense.
For each sales dollar, Mitsubishi earned .04 as net income. This is better.

According to sources online, the average asset ratio as of 2012 was 3.5%. For this case, Ford resulted to 5% return on assets.
Ford is doing well with a 36% equity ratio.

Knowing that EPS per companies try to reach an amount of 10% - 15% annually, Ford was successful for 2012, getting way m
Ford's stock is selling at 7.14 times one year's earnings.
An investor who buys Ford's common stock for $ 10.42 can expect to receive .5% of the investment annually.
This is good because to the investors, the lower the ratio, the more attractive the stock.

ach season. Also, Fords Industry Average is a 16.97, proving that they have been doing well.
enough. This can still be improved though.

se they are a car company.

high-risk position.

d to 5% return on assets. This is a much better ending result.

l for 2012, getting way more than 15% compare to 2011.

Annex 3:

Ratio
Measuring ability to pay current liabilities
1. Current Ratio
2. Acid-test (Quick) Ratio
Measuring ability to sell inventory and collect receivables
3. Inventory turnover
4. Accounts receivable turnover
5. Days' sale in receivables
Measuring ability to pay long-term debt
6. Debt Ratio
7. Times-interest-earned ratio
Measuring profitability
8. Rate of return on net sales
9. Rate of return on total assets
10. Rate of return on common stockholders' equity
11. Earnings (Loss) per share of common stock
Analyzing stock as an investment
12. Price/ earnings ratio
13. Dividend Yield
14. Book value per share of common stock

10

Computation of Ratios
Company Name:
Year:
Formula
Current Assets / Current Liabilities
Cash + STI + Net Current Receivables / Current Liabilities
Cost of goods sold / Average inventory
Net Credit Sales / Ave net accounts receivable
Ave net accounts receivable / One day's sales
Total liabilities / Total assets
Income from operations / Interest expense
Net Income / Net Sales
Net income + Interest expense / Ave total assets
Net Income - Preferred Dividends / Ave common stockholders' equity
Net income - Preferred Dividends / No. of shares of common stock outstanding
Market price per share of common stock / earnings per share
Annual div per share of common (or preferred) stock / MPS of common (or preferred) stock
Total SHE - Preferred equity / No. of shares of common stock outstanding

11

Mitsubishi
2011
Computation

Result

736,579 / 700,584

1.05

316,464 + 114,432 + 25,495 + 7,019/ 700,584

0.66

1,538,879 / (189,286 + 183,869 / 2)

8.25

1,828,497 / (114,432 + 121,385 / 2)

15.5

117,909 / 5,010

24 days

1,064,419 / 1,312,511

0.81

40,274 / 13,215

3.05

15,621 / 1,828,497

0.0085

15,621 + 13,215 / (1,312,511 + 1,258,669 /2)

0.02

15,621 - 50,000 / (121,009 + 105,221 / 2)

-0.30

15,621 - 50,000 / 5,537

-6.21

2,102 / -6.21

338.49

6/ 2,102

0.0028

121,009 / 5,537

21.85

12

Interpretation
Mitsibishi has Y1.05 current assets to pay Y1 of current liability. This is good.
Mitsubishi has Y0.66 of quick assets to pay Y1 of current liabilities. This is a weak position.
Mitsubishi sold inventory 8.25 times per year. This is something that needs to be improved.
Mitsubishi's receivable turnover of 15.5 is good.
It takes Mitsubishi 24 days to collect its accounts receivable. This is good.
Mitsubishi owes Y.81 for every Y1 in total assets. This borders on high risk.
Mitsubishi appears to have little difficulty servicing its debt.
For each sales dollar, Mitsubishi earned .0085 as net income. This is better.
For every Y1 of asset invested, Mitsubishi earned .02. This is good.
For every Y1 invested by common stockholders, Mitsubishi lost 0.30. This is bad.
For each share of the company's outstanding common stock, Mitsubishi lost 6.21. This is bad.
This is bad because Mitsubishi got negative for the P/E ratio.
The industry is paying this annually.
This is good because to the investors, the lower the ratio, the more attractive the stock.

13

Annex 3:

Ratio
Measuring ability to pay current liabilities
1. Current Ratio
2. Acid-test (Quick) Ratio
Measuring ability to sell inventory and collect receivables
3. Inventory turnover
4. Accounts receivable turnover
5. Days' sale in receivables
Measuring ability to pay long-term debt
6. Debt Ratio
7. Times-interest-earned ratio
Measuring profitability
8. Rate of return on net sales
9. Rate of return on total assets
10. Rate of return on common stockholders' equity
11. Earnings (Loss) per share of common stock
Analyzing stock as an investment
12. Price/ earnings ratio
13. Dividend Yield
14. Book value per share of common stock

14

Computation of Ratios
Company Name:
Year:
Formula
Current Assets / Current Liabilities
Cash + STI + Net Current Receivables / Current Liabilities
Cost of goods sold / Average inventory
Net Credit Sales / Ave net accounts receivable
Ave net accounts receivable / One day's sales
Total liabilities / Total assets
Income from operations / Interest expense
Net Income / Net Sales
Net income + Interest expense / Ave total assets
Net Income - Preferred Dividends / Ave common stockholders' equity
Net income - Preferred Dividends / No. of shares of common stock outstanding
Market price per share of common stock / earnings per share
Annual div per share of common (or preferred) stock / MPS of common (or preferred) stock
Total SHE - Preferred equity / No. of shares of common stock outstanding

15

Ford
2011
Computation
133,046 / 63,093
17,148 + 18,618 + 69,976 + 8,565 / 63,093
113,345 / (5,901 + 5,917 / 2)
136,264 / (69,976 + 70,070 /2)
70,023 / (136,264 / 365)

Result
2.11
1.81
19.18
1.95
188 days

163,277 / 178,348
20,222 / 4,431

0.92
4.56

20,213 / 136,264
20,213 + 4,431 / (178,348 + 164,687 /2)
20,213 / (15,071 + (-642) / 2)
20,213 / 3,745

15%
14%
2.8
5.4

10.62/ 5.4
.05 / 10.62
15,071 / 3,745

1.96
0.005
4.02

16

Interpretation
Ford has P2.11 of current assets to pay P1 of current liability. They have sufficient current assets.
The companys ratio is significanttly better than the industry average.

This is good because it means that the company was able to turnover their goods at least 4 times each season. Also, Fords In
1.95 is low for a company like Ford, but given the fact that they sell cars, their receivables turnover is enough. This can still b
Similar to the one stated above, it is alright that their days sale in receivables takes 188 days because they are a car compan
Fords debt ratio is 92% meaning almost all their assets are supported through loans. They are in a high-risk position.
Fords 4.56 ratio suggests difficulty in paying its interest expense.

For each sales dollar, Mitsubishi earned .15 as net income. This is better.
According to sources online, the average asset ratio as of 2012 was 3.5%. For this case, Ford resulted to 14% return on asset
Ford is not doing well with a 2.4 equity ratio.
For each share of the company's outstanding common stock, Mitsubishi earns 5.4. This is good.
Ford's stock is selling at 1.96 times one year's earnings.
An investor who buys Ford's common stock for $ 10.42 can expect to receive .5% of the investment annually.
This is good because to the investors, the lower the ratio, the more attractive the stock.

17

ach season. Also, Fords Industry Average is a 19.18, proving that they have been doing well.
is enough. This can still be improved though.
se they are a car company.

high-risk position.

d to 14% return on assets. This is a much better ending result.

18

Annex 6:

Computation of Ratios
Ford

Company Name:

2010

Year:
Ratio
Measuring ability to pay current liabilities
1. Current Ratio
2. Acid-test (Quick) Ratio
Measuring ability to sell inventory and collect receivables
3. Inventory turnover
4. Accounts receivable turnover
5. Days' sale in receivables
Measuring ability to pay long-term debt
6. Debt Ratio
7. Times-interest-earned ratio
Measuring profitability
8. Rate of return on net sales
9. Rate of return on total assets
10. Rate of return on common stockholders' equity
11. Earnings (Loss) per share of common stock
Analyzing stock as an investment
12. Price/ earnings ratio
13. Dividend Yield
14. Book value per share of common stock

19

Formula

Computation

Current Assets / Current Liabilities

Cash + STI + Net Current Receivables / Current Liabilities

130,206 / 60,206
14,805 + 20,7605 + 70,070 / 60,206

Cost of goods sold / Average inventory

Net Credit Sales / Ave net accounts receivable
Ave net accounts receivable / One day's sales

104,451 / (5,917 + 5,041 / 2)

128,954 / (70,070 + 75,892 /2)
72,981 / (128,954 / 365)

Total liabilities / Total assets

Income from operations / Interest expense
Net Income / Net Sales
Net income + Interest expense / Ave total assets
Net Income - Preferred Dividends / Ave common stockholders' equity
Net income - Preferred Dividends / No. of shares of common stock outstanding
Market price per share of common stock / earnings per share
Annual div per share of common (or preferred) stock / MPS of common (or preferred) stock
Total SHE - Preferred equity / No. of shares of common stock outstanding

Result
2.17
1.75

Interpretation
Ford has P2.11 of current assets to pay P1 of current liability. They have sufficient current assets.
The companys ratio is significanttly better than the industry average.

19.06
1.77
206.57

This is good because it means that the company was able to turnover their goods at least 4 times each season. Also, Fords Industry Average is a 19.18, proving that they have been doing well.
1.95 is low for a company like Ford, but given the fact that they sell cars, their receivables turnover is enough. This can still be improved though.
Similar to the one stated above, it is alright that their days sale in receivables takes 188 days because they are a car company.

165,329 / 164,687
122,296 / 6,152

1
19.88

Fords debt ratio is 92% meaning almost all their assets are supported through loans. They are in a high-risk position.
Fords 4.56 ratio suggests difficulty in paying its interest expense.

6,561 / 128,954
6,561 + 6,152 / (164,687 + 192,040 /2)
6,561 / ((-642) + (-7,782) / 2)
6,561 /

5.09%
7.13%
-1.56
5.4

For each sales dollar, Mitsubishi earned .15 as net income. This is better.
According to sources online, the average asset ratio as of 2012 was 3.5%. For this case, Ford resulted to 14% return on assets. This is a much better ending result.
Ford is not doing well with a 2.4 equity ratio.
For each share of the company's outstanding common stock, Mitsubishi earns 5.4. This is good.

10.62/ 5.4
.05 / 10.62
15,071 / 3,745

1.96
0.005
4.02

Ford's stock is selling at 1.96 times one year's earnings.

An investor who buys Ford's common stock for $ 10.42 can expect to receive .5% of the investment annually.
This is good because to the investors, the lower the ratio, the more attractive the stock.