Reference no: EM133010339
Question - The following list of accounts were provided for AMC Inc. in their Annual Report
2020 2019
Net Sales $1,555,067 $1,478,326
Interest expense 22,734 18,936
Income tax expense 27,490 31,327
Net Income 77,346 87,991
Total current assets 245,172 182,187
Total assets 1,855,168 1,728,186
Total current liabilities 515,324 402,039
Total liabilities 1,143,392 976,291
Total shareholders' equity 711,776 751,895
Market price per share 66.94 78.87
Number of Common Shares 563,474 563,451
Required -
a. Calculate the following Ratio's for 2020
Asset Turnover
Times Interest Earned
Return on Assets
Current Ratio
Profit Margin
Return on Equity
Debt to Total Assets
b. Indicate whether each of the above ratios is a measure of liquidity (L), solvency (S), or profitability (P).
c. Interest Expense has increased by over 20%. What could be a reason why this has increased?
d. Which ratios would be most important to a bank in determining if a loan should be granted. If you were the VP of loans for the Royal Bank of Canada would you approve a $50 million loan to this company?
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