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So, here are some company ratios for a fictional retail company along with industry averages.  (Part A):...

So, here are some company ratios for a fictional retail company along with industry averages.  (Part A): Go through and determine basic trending for each category. (Part B): Then, based on what you learned here, you will need to determine the overall health of the company based on your trend analysis. What do your trends say in terms of the industry averages and the overall health of this company? Yes, I realize no specific industry is shown. This is a simple exercise on industry analysis. If you are unsure what some of these ratios are, please review a finance textbook, the information I placed into Module Five's area, and/or the information contained in your textbook, pages C8 – C12. For the trending for each category, just a few words or numbers. Please be specific, not “it increased” or “it decreased.” Think like a business person when you do this one!

Part A:

Ratios

2016

2014

    2012

*Industry AVG

(2012 - 2016)

Trend Analysis

Current

1.1X

1.1X

    2.3X

2.7X

Quick

.5X

.4X

      .8X

1.0X

Inventory Turnover

4.5X

4.5X

4.8X

6.1X

Average Collection Period (ACP)/Days Sales Outstanding (DSO)

45.0 days

39.0 days

36.8 days

32.0 days

Fixed Assets Turnover

8.2X

6.2X

   10.0X

7.0X

Total Assets Utilization (Turnover)

1.5X

2.0X

     2.3X

2.6X

Debt to total Assets ratio

88.9%

95.4%

    54.8%

50.0%

TIE

-.10X

-3.9X

     3.3X

6.2X

Fixed Charge Coverage

3.0X

-3.0X

     2.4X

5.1X

Profit Margin on Sales

3.0%

-8.9%

     2.6%

3.5%

ROA (Total Assets)

1.2%

-18.1%

    6.0%

9.1%

P/E

.50X

-1.40X

    9.7X

7.2%

Market/Book Value
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