Compute the liquidity ratios for 2009 and 2008

Assignment Help Financial Accounting

Reference no: EM13177477

Borders Group, Inc., presented this information in its 10-K's:

Required

a. Compute the following liquidity ratios for 2009 and 2008:

1. Days' sales in inventory
2. Inventory turnover (use ending inventory)
3. Working capital
4. Current ratio
5. Cash ratio
6. Sales to working capital (use ending working capital)
7. Operating cash flow/current maturities of long-term debt and current notes payable

b. Compute the following long-term debt-paying ability for 2009 and 2008:

1. Debt ratio
2. Operating cash flow / total debt

c. Compute the following profitability ratios for 2009 and 2008:

1. Net profit margin
2. Return on assets (use end of year total assets)
3. Return on total equity (use end of year total equity)
4. Gross profit margin

d. Compute or obtain the following investor analysis:

1. Earnings per common share
2. Operating cash flow/cash dividends

e. Comment on the results in (a), (b), (c) and (d)

f. Comment on the trend in net income (loss)

g. Comment on significant trends (items) in the Consolidated Statement of Cash Flows

h. Using these ratios for 2009 and 2008, comment using the Beaver Study on possible financial failure:

1. Cash flow/total debt
2. Net income/total assets (return on assets)
3. Total debt/Total assets (debt ratio)

Reference no: EM13177477

Questions Cloud

What are the mean and standard deviation of the scores : Suppose that Ford's performance scores really are Normally distributed. This year, managers with scores less than 31 received C's and those with scores above 595 received A's. What are the mean and standard deviation of the scores?

Prepare tulsa companys income statement : Prepare Tulsa Company's income statement for 2012, beginning with Income before irregular items.

Categories of owners have unlimited liability : Which of the following categories of owners have unlimited liability?

What is the gain in net social benefits : Suppose a tax per unit output (per-unit tax) is imposed on the production of Q with the intent of making equal the market level of output and the socially efficient level. How high should that per-unit tax be? What is the gain in net social benefi..

Compute the liquidity ratios for 2009 and 2008 : Compute the liquidity ratios for 2009 and 2008 - Days' sales in inventory, inventory turnover and working capital

Limited partnership : Which of the following is NOT true for a limited partnership?

Maximization of shareholder wealth : Maximization of shareholder wealth as a goal is superior to profit maximization because:

Marketing and management strengths and weakness : Why was Caterpillar able to meet Japanese competition and succeed where other major U.S. manufacturers failed? For example, what did Caterpillar do that the big three auto makers have not done? Evaluate Caterpillar Inc.'s marketing and management st..

Consequences of the veil of incorporation : Write a brief explanation about why the directors' duty to prevent insolvent trading exists and the circumstances and consequences of the ‘veil of incorporation' being lifted for insolvent trading.

User Account

All Pages