Question

CASE 1-5 Financial Statement Ratio Computation Refer to Campbell Soup Company's financial Campbell Soup statements in Appendix A. Required: Compute the following ratios for Year 11. Liquidity ratios: Asset utilization ratios:* a. Current ratio n. Cash turnover b. Acid-test ratio 0. Accounts receivable turnover c. Days to sell inventory p. Inventory turnover d. Collection period 4. Working capital turnover Capital structure and solvency ratios: 1. Fixed assets turnover e. Total debt to total equity s. Total assets turnover f. Long-term debt to equity Market measures (Campbell's stock price per share is g. Times interest earned $46.73 for Year 11): Return on investment ratios: t. Price-to-earnings ratio h. Return on total assets u. Earnings yield i. Return on common equity v. Dividend yield Operating performance ratios: w. Dividend payout rate j. Gross profit margin ratio x. Price-to-book ratio k Operating profit margin ratio 1. Pretax profit margin ratio m. Net profit margin ratio * For simplicity in computing utilization ratios, use end-of-year values and not average values.

Answer 1

AE Answers : 1. Liquidity Ratios. La Current 1.19: 1 Ratio en Current assets Current Liab. 1518.5 1278.0 b. Acid tost Ratio Current Assets - Current Liab. Inventory 1518.5- 7061 1278.0 = 0.64 :1 ac Days to Sell Toventory x 365. Inventory COGS x 365 106.70 4095.5 = 63 days . Collection Period - Accounts receivable x 365 Sales X 365 507,410 6204.10 = 31 days

2. Capital Structure de Solvency Ratio e Total debt to total equity Toral Liabilities Shareholders equity 2355.60 1793.40 1.31 F. Long term debt to equity - Long term debt Equity 172.60 1193.40 - 0,43 9 Times Interest earned EBIT Interest Exp. 661.40 + 116.20 116.20 - 6.74 3 Return on Investment h Return on total assets - Net Income Arg total assets

9.71'. 401.50 (4149.0 + 4115.6)/2 i Return on COMMON espeity - Net Income COMMOn equity - 19.77 times 401.50 20.3 4. Operating performance Ratio Gross profit Ratio . Gross Profit X 100 Sales 6204.10 - 4095.50 x 100 - 39.981. 6204.10 k Operating profit Ratio - EBIL x 100 Sales x 100 = 8,88%. 551.20 6204.10 1. Pretax Profit Ratio - 667.40 x 100 6204.10 - 10.75 m. Net Profit Ratio = 6.47% = 401.50 x 100 6204.10

5. Aseet Utilization Ratio n. Cash Turnover -- Sales Avg. Cash 6204.10 (178,90 + 30. 12 47.79 O Accounts Receivable Turnover Credit Sales Avg. receivable 6204.10 (527,40 + 624.50) 12 - 10. Inventory Turnover - Sales Avg. Inventory 8.12 6204,10 (706,40 +819.80) 12 4. Working Capital Turnover - sales Arg working cap 6204.10 (940.5 +367.4) 12 20.41

r. Fixed Assets Turnover = Sales Avg. Fixed assets 3.53 6204.10 (1790.40 + 1111102 s. Total Assets Turnover - Sales Avg totoel assets 1.50 6204.10 (4149 +4115.6) 12 6. Market Measures t. Price to earning Ratio = Market value EPS per share 48.87 We 3.16 #46.15.46 4. Earning yield - EPS Market value Per Share - 3.16 48.87 0.06 (6%) Dividend Yield = DPS Price per share -0.62 (27) 1.12 48.87

= w. Dividend payout Rate DPS EPS - 1.12 3.16 0.35 x. Price to book Ratio - Market value Book Value 48.87 14.12 . 53.46 Note: is Market value per share on average basis calculated