Using the information below, calculate the following ratios for both companies for 2019and compare/contrastEACHratio.
a. DSO
b. Quick Ratio
c. Times Interest Earned
d. Total Liabilities-to-Equity
e. Free Operating cash flow to total debt
f. Current Ratio
g. Total debt to equity
h. Accounts receivable turnover
Homework Answers
| Ratios | Capri | Omega | |
| 1 |
DSO (Days Sales Outstanding) =(average accounts receivable/net sales)*365 Or (365 / accounts receivable turnover ratio) |
(55680 / 226761) *365 =89.63 DAYS |
(12481 / 155739) *365 =29.26 days |
| 2 |
Quick Ratio =(Current assets - Inventories)/Current Liabilities |
133664-31045/45478 =2.26 times |
22262-15762/6504 =0.99938 times OR 1.00 |
| 3 |
Times Interest Earned =Earnings Before Interest and Tax/Total Interest earned |
7709 / 254 =30.35 |
6186 / 125 =49.49 |
| 4 |
Free Operating Cash Flow to total debt = (Cash Flow from Operations + interest expense net of tex - Capital expenditure)/ Total Debt |
(3590+254-537) / 96812 =0.034 OR 0.03 |
(1890+125-10) / 8430 =0.2378 OR 0.24 |
| 5 |
Current Ratio =Current Assets/Current Liabilities |
133664 / 45478 =2.939 times or 2.94 times |
22262 / 6504 =3.4228 times OR 3.43 Times |
| 6 |
Total Debt/Equity =(Short term+Long term debt)/Total equity |
96812 / 63862 =1.515 or 1.52 |
8430 / 38851 =0.216 or 0.22 |
| 7 |
Accounts Receivable Turnover Ratio =Net Sales/Average Accounts Receivable Net sales = Gross Sales - returns |
226761 / 55680 =4.0725 or or 4.073 |
155739 / 12481 =12.478 or 12.48 |
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