Please help with the case study comprehensive question for 5-36. Pictures Below.
Those ratios which use average in calculation, ending total balance has been considered as no information was provided for 2016.
gross profit margin | (gross profit / sales)*100 | |
2017 ($) | 2018 ($) | |
gross proft | 20000 | 22000 |
sales | 40909 | 45000 |
gross profit margin | 48.9% | 48.9% |
On comparing with the industry (50%), it has declined. It has remained stable for both the periods | ||
operating profit margin | (operating profit / sales)*100 | |
2017 ($) | 2018 ($) | |
operating profit | 6182 | 6000 |
sales | 40909 | 45000 |
operating profit margin | 15.1% | 13.3% |
On comparing with the industry (15%), it has remained stable for 2017 but declined for 2018. It's deteriorating in 2018. | ||
net profit margin | (net income / sales)*100 | |
2017 ($) | 2018 ($) | |
net income | 4336 | 4191 |
sales | 40909 | 45000 |
net profit margin | 10.6% | 9.3% |
On comparing with the industry (8%), it is doing better. It's deteriorating in 2018. | ||
return on assets | net income / ending total assets | |
2017 ($) | 2018 ($) | |
net income | 4336 | 4191 |
ending total assets | 30000 | 33620 |
return on assets | 14.5% | 12.5% |
On comparing with the industry (10%), it is doing better. It's deteriorating in 2018. | ||
return on equity | net income / shareholders equity | |
2017 ($) | 2018 ($) | |
net income | 4336 | 4191 |
shareholders equity | 18000 | 20620 |
return on equity | 24.1% | 20.3% |
On comparing with the industry (20%), it is was better in 2017 but remained stable in 2018. It's deteriorating in 2018. | ||
current ratio | current assets / current liabilities | |
2017 ($) | 2018 ($) | |
current assets: | ||
cash | 2000 | 1800 |
accounts receivable | 6000 | 7600 |
inventory | 5000 | 5220 |
total current assets | 13000 | 14620 |
current liabilities: | ||
accounts payable | 2000 | 2600 |
notes payable | 3000 | 3300 |
accrued expenses | 3000 | 3100 |
total current liabilities | 8000 | 9000 |
current ratio | 1.6 | 1.6 |
On comparing with the industry (1.5), it is was better. It remained stable for both the periods. | ||
quick ratio | acid-assets / current liabilities | |
2017 ($) | 2018 ($) | |
acid assets | ||
cash | 2000 | 1800 |
accounts receivable | 6000 | 7600 |
total acid assets | 8000 | 9400 |
total current liabilities | 16000 | 18800 |
quick ratio | 0.5 | 0.5 |
On comparing with the industry (1.5), it is was worse for both the periods. No changes in both the periods | ||
debt to total assets | total debt / total assets | |
2017 ($) | 2018 ($) | |
debt: | ||
notes payable | 3000 | 3300 |
bonds payable | 4000 | 4000 |
total debt | 7000 | 7300 |
ending total assets | 30000 | 33620 |
debt to total assets | 0.2 | 0.2 |
On comparing with the industry (0.5), it was worse for both the periods. No changes in both the periods | ||
times interest earned | EBIT / interest expense | |
2017 ($) | 2018 ($) | |
EBIT | 6182 | 6000 |
interest expenses | 400 | 412 |
times interest earned | 15.5 | 14.6 |
On comparing with the industry (25), it was worse for both the periods. It's deteriorating in 2018. | ||
average collection period | (ending accounts receivable / sales)*365 | |
2017 ($) | 2018 ($) | |
ending accounts receivable | 6000 | 7600 |
sales | 40909 | 45000 |
average collection period | 54 | 62 |
On comparing with the industry (45 days), it was worse for both the periods. It's deteriorating in 2018. | ||
inventory turnover | cost of goods sold / ending inventory | |
2017 ($) | 2018 ($) | |
cost of goods sold | 20909 | 23000 |
ending inventory | 5000 | 5220 |
inventory turnover | 4.2 | 4.4 |
On comparing with the industry (8), it was worse for both the periods. No significant change in 2018. | ||
total assets turnover | sales / ending total assets | |
2017 ($) | 2018 ($) | |
sales | 40909 | 45000 |
ending total assets | 30000 | 33620 |
total assets turnover | 1.4 | 1.3 |
On comparing with the industry (1.6), it was low for both the periods. No significant change in 2018. |
Please help with the case study comprehensive question for 5-36. Pictures Below. You are the loan...
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