2014 2013 Return on Assets 1.52 3.52 Return on Equity 13.30 27.44 Total Debt Ratio 88.20...
|
2014 |
2013 |
|
|
Return on Assets |
1.52 |
3.52 |
|
Return on Equity |
13.30 |
27.44 |
|
Total Debt Ratio |
88.20 |
87.28 |
What do these three ratios tell you about the long-term solvency and profitability of Ford during these three years? Provide a short analysis
Homework Answers
Return on assets and return on equity both are the ratios to judge the profitability of a company. Higher these ratios, better these are considered. Thus, an increase in these ratios indicates that profitability of the company has increased and a decrease in these ratios indicates that profitability has decreased as compared to the previous period.
Return on assets has fallen from 3.52% in 2013 to 1.52% in 2014.
Return on equity has fallen from 27.44% in 2013 to 13.30% in 2014.
Fall in return on assets and return on equity indicates that overall profitability of the company has decreased in 2014 as compared to the year 2013.
Total debt ratio (Total debt/Total assets) is an indicator of long term solvency of a company. Lower the ratio, better it is considered. If total debt ratio decreases, it indicates that long term solvency has improved as compared to the previous period. An increase in the total debt ratio indicates that long term solvency has reduced.
Total debt ratio has increased from 87.28% in 2013 to 88.20% in 2014.
Total debt ratio has increased marginally in the year 2014 which shows that debt percentage has increased marginally in the year 2014 and thus long term solvency has been hit negatively marginally.
Kindly comment if you need further assistance. Thanks
Add Answer to:
2014
2013
Return on Assets
1.52
3.52
Return on Equity
13.30
27.44
Total Debt Ratio
88.20...
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Please show formulas.
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a) What is the retention ratio for 2012, 2013, and 2014?
b) What is the sustainable growth rate for 2012, 2013, and
2014?
c) what is the actual growth rate for 2013 and 2014?
d) what is the equity multiplier for 2012, 2013, and 2014?
Please show formulas.
2014 14,000 71,632 878,000 715,2001,287,3601,716,480 1,946,8022,680,112 836,840 1,468,8002,886,5923,516,952 Balance Sheets 2012 9,000 48,600 2013 7,282 as Short-term investments Accounts receivable Inventory Total Current Assets Net Fixed Assets Total Assets 351,200 632,160 1,124,0001...
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