Question

please help me find ratio analysis for chipotle and mcdonalds for fiscal years 2018 and 2017, Liquidity: current ratio and quick ratio, Asset Management :  total asset turnover, what is the average collection period,Debt Management: total debt to total assets, and times interest earned, :Profitablity net profit margin, returned on assets, returned on equity, modified du pont equation, Market Value Ratios:  PE ratio, Market to book ratio.

Answer 1

1.CURRENT RATIO :

The current ratio is a liquidity ratio that measures a company's ability to pay short-term obligations or those due within one year. It tells investors and analysts how a company can maximize the current assets on its balance sheet to satisfy its current debt and other payables .

formula : CURRENT RATIO = CURRENT ASSETS / CURRENT LIABILITIES

  

2. QUICK RATIO :

  

The quick ratio is a financial ratio used to gauge a company's liquidity. The quick ratio is also known as the acid test ratio.

The quick ratio compares the total amount of cash and cash equivalents + marketable securities + accounts receivable to the amount of current liabilities

FORMULA ; QUICK RATIO = QUICK ASSETS / CURRENT LIABILITIES

  QUICK ASSETS = CURRENT ASSETS - INVENTORY

3.TOTAL ASSET TURNOVER RATIO :

The asset turnover ratio measures the value of a company's sales or revenues relative to the value of its assets.

The asset turnover ratio can be used as an indicator of the efficiency with which a company is using its assets to generate revenue.

FORMULA: TOTAL ASSET TURNOVER RATIO

= TURNOVER OR SALES / TOTAL ASSETS

The asset turnover ratio measures the value of a company's sales or revenues relative to the value of its assets.

The asset turnover ratio can be used as an indicator of the efficiency with which a company is using its assets to generate revenue.

4.AVERAGE COLLECTION PERIOD :

  The average collection period is the amount of time it takes for a business to receive payments owed by its clients in terms of accounts receivable (AR).

Companies calculate the average collection period to make sure they have enough cash on hand to meet their financial obligations.

FORMULA :

ACP = AVERAGE ACCOUTS RECEIVABLE / TOTAL CREDIT SALES

5.TOTAL DEBT TO TOTAL ASSETS RATIO    total-debt-to-total-assets is a leverage ratio that defines the total amount of debt relative to assets.

This metric enables comparisons of leverage to be made across different companies

The higher the ratio, the higher the degree of leverage (DoL) and, consequently, financial risk.

FORMULA = (SHORT TERM AND LONG TERM DEBT ) / TOTAL ASSETS

6.NET PROFIT MARGIN:

  The net profit margin is equal to how much net income or profit is generated as a percentage of revenue.

Net profit margin is the ratio of net profits to revenues for a company or business segment.

FORMULA

NET PROFIT MARGIN= NET INCOME / REVENUE

7.RETURN ON ASSETS :

  The return on assets ratio, often called the return on total assets, is a profitability ratio that measures the net income produced by total assets during a period by comparing net income to the average total assets.

Return on Assets Ratio Net Income Return on Assets Ratio = Average Total Assets

8.RETURN ON EQUITY :

  

Return on equity (ROE) is a measure of financial performance calculated by dividing net income by shareholders' equity. Because shareholders' equity is equal to a company’s assets minus its debt, ROE could be thought of as the return on net assets.

ROE is considered a measure of how effectively management is using a company’s assets to create profits.

FORMULA

Return on Equity= NET INCOME /Average Shareholders’ Equity

9.PRICE TO EARNING RATIO

  The price-to-earnings ratio (P/E ratio) is the ratio for valuing a company that measures its current share price relative to its per-share earnings (EPS).

The price-to-earnings ratio is also sometimes known as the price multiple or the earnings multiple.

FORMULA :

  

P/E Ratio= market price per share /Earnings per share