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Comprehensive Ratio Analysis Data for Lozano Chip Company and its industry averages follow. Lozano Chip Company: Balance Sheea. Calculate the indicated ratios for Lozano. Do not round intermediate calculations. Round your answers to two decimal place

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Current Assets / Current Liabilities = 2970000 / 1260000 = 2.36

Days sales outstanding = 365 / (Sales / Avg. accounts receivable) = 365 / ( 7500000 / (1575000 )

                                   = 365 / 4.76 = 76.68 Days

COGS / Inventory = 6375000 / 1160000 = 5.495

Sales / Fixed Assets = 7500000 / 1355000 = 5.54

Sales / Total Assets = 7500000 / 4325000 = 1.73

Net Income / Sales = 124500 / 7500000 = 1.66%

Net Income / Total Assets = 124500/ 4325000 = 2.88%

Net Income / Common Equity = 124500/ 2665000 = 4.67%

Total Debt / Total Assets = 400000 / 4325000 = 9.25%

Total Liabilities / Total Assets = (1260000 + 400000 ) / 4325000 = 38.3%

b.ROE dupont = Profit Margin x Assets Turnover x Equity Multiplier

Lozano = 1.66% x 1.73 x (4325000 / 2665000 ) = 1.66% x 1.73 x 1.62 = 4.67%

Industry = 1.2% x 3 x 2.5 = 9%

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