PROJECT:
Select any bank / firm of your choice. Take out its financial statements.
Calculate the following ratios according to the information found in these statements.
(NOTE: Show your workings)
Ans:
Note: Values have been taken from yahoo finance for Apple Inc. for the year ended 29/09/2019
Number of days of inventory = Inventory / Average days of goods sold
= Inventory / (Cost of goods sold/365)
Were
Inventory = 4,106,000
Cost of goods sold = 161,782,000
Hence
Number of days of inventory = 4,106,000 / (161,782,000 / 365)
= 9.26
Number of days of receivables = Accounts Receivables / Average day’s sales on credit
= Accounts Receivables / (Sales on credit/365)
Where
Accounts Receivables = 22,926,000
Sales on credit = 260,174,000 [ it is assumed that all sales are cedit sales]
Hence
Number of days of receivables = 22,926,000 / (260,174,000 / 365)
= 32.16
Number of days of Payable = Accounts Payable / Average day’s Purchase
= Accounts Payable / (Purchase/365)
Where
Accounts Payable = 46,236,000
Purchase = Cost of goods sold + Closing inventory – Opening inventory
= 161,782,000 + 4,106,000 – 3,956,000
= 161,932,000
Hence
Number of days of Payable = 46,236,000 / (161,932,000 /365)
= 104.22
Current Ratio = Current assets / Current Liabilities
Where
Current assets = 162,819,000
Current Liabilities = 105,718,000
Hence
Current Ratio = 162,819,000 / 105,718,000
= 1.54
Quick Ratio = (Current assets – Inventory) / Current Liabilities
Where
Current assets = 162,819,000
Inventory = 4,106,000
Current Liabilities = 105,718,000
Hence
Quick Ratio = (162,819,000 – 4,106,000) / 105,718,000
= 1.50
Net Working Capital to sales Ratio = (Current Assets – Current Liabilities) / Sales
Where
Current assets = 162,819,000
Current Liabilities = 105,718,000
Sales = 260,174,000
Hence
Net Working Capital to sales Ratio = (162,819,000 – 105,718,000) / 260,174,000
= 0.22
Gross Profit margin = Gross income / Sales
Where
Gross income = 98,392,000
Sales = 260,174,000
Hence
Gross Profit margin = 98,392,000 / 260,174,000
= 0.38
Operating Profit margin = Operating income / Sales
Where
Operating income = 63,930,000
Sales = 260,174,000
Hence
Operating Profit margin = 63,930,000 / 260,174,000
= 0.25
Total debt to asset ratio = Total debt / Total assets
Where
Total debt = 248,028,000
Total assets = 338,516,000
Hence
Total debt to asset ratio = 248,028,000 / 338,516,000
= 0.73
Long-term debt to asset ratio = Long-term debt / Total assets
Where
Long-term debt = 142,310,000
Total assets = 338,516,000
Hence
Long-term debt to asset ratio = 142,310,000 / 338,516,000
= 0.42
Total debt to equity ratio = Total debt / Total shareholder’s equity
Where
Total debt = 248,028,000
Total shareholder’s equity = 90,488,000
Hence
Total debt to equity ratio = 248,028,000 / 90,488,000
= 2.74
PROJECT: Select any bank / firm of your choice. Take out its financial statements. Calculate the...
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