Calculate the following for each of the years listed A. Debt/ Equity ratio B. Debt/asset ratio...
Calculate the following for each of the years listed
A. Debt/ Equity ratio
B. Debt/asset ratio
C.Profit Margin (as a %)
D. Gross Margin (as a %)
E. Calculate the change in profit margin over each year
Exhibit 1: Iggy’s Financial Statements, 1994-1999
|
1994 |
1995 |
1996 |
1997 |
1998 |
1999 |
|
|
Income Statement Data |
||||||
|
Net revenue |
1,000,000 |
2,500,000 |
3,000,000 |
4,000,000 |
4,500,000 |
6,000,000 |
|
Cost of goods sold Labor Other |
570,000 220,000 350,000 |
1,700,000 900,000 800,000 |
1,920,000 1,080,000 840,000 |
2,520,000 1,480,000 1,040,000 |
3,195,000 1,890,000 1,305,000 |
4,000,000 2,340,000 1,740,000 |
|
Gross margin |
430,000 |
800,000 |
1,080,000 |
1,480,000 |
1,305,000 |
2,000,000 |
|
Profit after taxes (PAT) |
190,000 |
375,000 |
480,000 |
150,000 |
25,000 |
140,000 |
|
Balance Sheet Data |
||||||
|
Current Assets |
N/A |
200,000 |
250,000 |
500,000 |
500,000 |
700,000 |
|
Net PP&E |
N/A |
350,000 |
300,000 |
300,000 |
3,000,000 |
3,000,000 |
|
Total Assets |
N/A |
550,000 |
500,000 |
850,000 |
3,000,000 |
3,700,000 |
|
Long term debt |
0 |
10,000 |
15,000 |
20,000 |
1,500,000 |
2,000,000 |
Homework Answers
As per rules I am answering the first 4 subparts of the question
| 1994 | 1995 | 1996 | 1997 | 1998 | 1999 | |
| A. Debt/ Equity ratio | NA | 0.018519 | 0.030928 | 0.024096 | 1 | 1.176471 |
| B. Debt/asset ratio | NA | 0.018182 | 0.03 | 0.023529 | 0.5 | 0.540541 |
| C.Profit Margin (as a %) | 19.00% | 15.00% | 16.00% | 3.75% | 0.56% | 2.33% |
| D. Gross Margin (as a %) | 43.00% | 32.00% | 36.00% | 37.00% | 29.00% | 33.33% |
WORKINGS
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