User Account

All Pages

Liquidity ratios

Assignment Help Finance Basics
Reference no: EM13829961

Locate a publicly traded U.S. company of your choice. Then, calculate the following ratios for the company for 2012 and 2013:

  • Liquidity Ratios
    • Current ratio [current assets / current liabilities]
    • Quick ratio [(current assets - inventory) / current liabilities]
  • Asset Turnover Ratios
    • Collection period [accounts receivable / average daily sales]
    • Inventory turnover [cost of goods sold / ending inventory]
    • Fixed asset turnover [sales / net fixed assets]
  • Financial Leverage Ratios
    • Debt-to-asset ratio [total liabilities / total assets]
    • Debt-to-equity ratio [total liabilities / total stockholders' equity]
    • Times-interest-earned (TIE) ratio [EBIT / interest]
  • Profitability Ratios
    • Net profit margin [net income / sales]
    • Return on assets (ROA) [net income / total assets]
    • Return on equity (ROE) [net income / total stockholders' equity]
  • Market-Based Ratios
    • Price-to-earnings (P/E) ratio [stock price / earnings per share]
    • Price-to-book (P/B) ratio [market value of common stock / total stockholders' equity]

You are now ready to interpret the ratios that you have calculated. If a ratio increased from 2012 to 2013, why do you think that it increased? Is it a good or bad sign that the ratio increased? Please explain.

If a ratio decreased from 2012 to 2013, why do you think that it decreased? Is it a good or bad sign that the ratio decreased? Please explain.

If a ratio was unchanged from 2012 to 2013, why do you think that it was unchanged? Is it a good or bad sign that the ratio was unchanged? Please explain

 

 

Reference no: EM13829961

Questions Cloud

How technological advance can contribute to economic growth : Define economic growth, and explain what it means in terms of standards of living. Explain how a technological advance can contribute to economic growth. Why do institutions such as private property rights promote economic growth?
High risk for identity theft : The close quarters of most college dormitories means college students are at a high risk for identity theft.
Illustrate the interaction between different forces : Explain how the six external forces could combine/integrate together to have more complex effects on changes in the workplace. For example, technological changes could accelerate reorganization of work. Give some real examples to illustrate the inter..
Message aligns with the material covered thus far : Discuss a time when you have had to deal with a sensitive and/or a negative message. What would you do differently in light of the material covered in this module? If you would do nothing differently, describe how your handling of the message aligns ..
Liquidity ratios : Liquidity Ratios Current ratio [current assets / current liabilities] Quick ratio [(current assets - inventory) / current liabilities]
Capital would be recovered at the end of the project : The equipment cost is $50,000 and it would cost another $10,000 to modify it. Assume that the equipment falls into the MACRS 3-year class. The equipment will be sold after 3 years for $20,000. It would require an increase in net working capital of $2..
Price falls below minimum average variable cost : Why does it make sense for a firm to shut down in the short run if the price falls below minimum average variable cost?
What problem is the economy facing : What problem is the economy facing? Assume you are a governor on the Federal Reserve Board of Governors. What type of policy (easy money or tight money) would you recommend to fix the problem you identified in question 1? Which tool(s) would you reco..
Therefore shift the aggregate supply curve to the left : Which one of the following would increase per-unit production cost and therefore shift the aggregate supply curve to the left?

Reviews

Write a Review

Finance Basics Questions & Answers

  Failure of merger and acquisition

Describe the reasons why an M&A fails, such as technical and legal insolvency, and bankruptcy. Consider what happens to stakeholders, company image, price-per-share, market share, company assets, industry position, goodwill, and service capability...

  How much long-term debt does the firm have

It also has current liabilities of $150,000, equity of $200,000 and retained earnings of $100,000. the mariginal tax rate for the firm is 30%. How much long-term debt does the firm have?

  Computing revenue variance-expense variance

What is Painless' revenue variance? Is the total revenue variance favorable or unfavorable? Why? What is Painless' expense variance? Is the total expense variance favorable or unfavorable? Why?

  Legal definition of the crime

What is the legal definition of the crime of obtaining goods by false pretenses?  Do the facts in the case satisfy the definition?  Explain.

  Someone suggested that pumped hydro might work but before

you are considering buying some land that use to be part of a sheep farm. the property is too far away from the grid so

  Gray has a current capital structure consisting of 400000

gray has a current capital structure consisting of 400000 of 12 annual interest debt and 50000 shares of common

  What kind of intervention would that country central bank

If a country's par exchange rate was undervalued during the Bretton Woods fixed exchange rate regime, what kind of intervention would that country's central bank be forced to undertake, and what effect would it have on it's international reserves ..

  Calculate for alice the total cash value of the annuity

Alice Longtree has decided to invest $400 quarterly for 4 years in an ordinary annuity at 8%. As her financial adviser, calculate for Alice the total cash value of the annuity at the end of year 4.

  Decide upon an initiative you want to implement that would

decide upon an initiative you want to implement that would increase sales over the next five years.using the sample

  Determine how often the supermarket should order alma cola

the demand for alma cola soft drink at daisy supermarket is 200 bottles every week. the setup cost for placing an order

  Determine one 1 significant benefit to an organization that

leasing equipmentnbsp please respond to the followingsuggest one 1 key economic factor that motivates leasing as an

  What is the amount you will have in the bank at the end

given that compounding is quarterly 19 B is considering a drug project that costs $180,372 today and is expected to generate end-of-year annual cash flows of $11,811, forever At what discount rate would B be indifferent between accepting and rejec..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd