Question

Excel SIM: Selected Financial Ratios 1. Compute and interpret financial ratios that managers use to assess liquidity. 2. Compute and interpret financial ratios that managers use for asset management purposes 3. Compute and interpret financial ratios that managers use for debt management purposes. points SS.fi FILE HOME INSERT ? X Selected Financial Ratios - Excel FORMULAS DATA REVIEW - Sign In eBook PAGE LAYOUT VIEW Print * Calibri -110 A À = % D D References Paste B I U - - - A - Alignment Number C Editing Conditional Format as Cell Formatting Table Styles Styles Cells - Clipboard Font C45 Zimmer Company Income Statement Last Year This Year 1 Recent financial statements for Zimmer, Inc. are as follows: Zimmer Company Comparative Balance Sheet This Year 5 Assets 6 Current assets: 7 Cash 360,000 8 Marketable securities 220,000 9 Accounts receivable, net 775,000 $ 310,000 Sales (all on account) 80,000 Cost of goods sold 700,000 Gross margin $4,980,000 2,988,000 1.992,000

Answer 1

1. 2. Gross Profit Margin = Gross Profit X100 DO BI BSE Sales til = 1992000 X 100 DEL 4980000 bozuoy. Current Ratio = current Assets current liabilities - 2635000 Ou t let wildniji 1825000 = 1.44 Acid - test Ratio e Quick Assets Current liabilities - (Cash & Marketable + Accounts securities receivable) 1 Cuslent liabilities (36000 0 + 220000+ 775000) 1825000 = 0.74! 3.

4. Account Receivable turnover - Cred Iso el Avelar credit sales verage Account Receivable 5. TI e ron 75000 x 360 6. 980000 DO D 02775000 E6603 6.43 Average collection Period Receivable x 360 - Credit sales Dust soos PH 4980000* 99999 = 56.08 days Inventory Turnover Ratio = co - 129.88000 o (350000, +925.000) wolenir totusi 2988000 837500 = 3.57 : 1 Average Sales Perioed = Average Inventy - cost of sales wat Average Incentri Fluo weit I. D ja = 837500 Slee 8988000-X360 = 100.90 days

8. Debt to Equity Ratio = Total outside payable - Shareholder equiry tem Bank tans & Bond vooo Shareholder Equity 750000 +575000 ch.od 85000 que, alone is 0.58 coitha pune 9. Times Interest earned - EBIT Interest 446000 60000 19 cite = 7.43 10. Book value per share Shareholde's Eau کی نمک کار لم is equity shares outstanding 2285000 common stock | Pervalue of pee I share 9285000 115000020 = $39.74 - Net Income Earning fer shale = shares outstanding z 2 50900 1150000/ 20 = $4.36

13. Dividend Yield Ratio = Dividend Payout Ratio - Dividend per equity share 1. Earning per share 4.36 0.23! ! cend Yield Ratio - Dividend per share - Market price per share =u - 0.og! 1 Price Earning Ratio = Market Price per share Eaining Per share 42 4.36 = 9.63 times 14.