Homework Answers
| 1 | Liquidity Ratio:- | |||||
| . | ||||||
| Current Ratio :- Current Asset/ Current liability | ||||||
| Particular | 2017 | 2018 | 2019 | |||
| Total Current Assets | 19,939 | 19,880 | 20,151 | |||
| Total Current Liability | 17,791 | 18,526 | 14,859 | |||
| Current Ratio | 1.12 | 1.07 | 1.36 | |||
| The ideal current ratio of the company is 1.2 to 2. In the year 2017 the company is maintaining the ratio of 1.12. In year 2018, the current liabilities has been increasing and the current ratio drops down to 1.07. This indicates bad performance of the company and may company face liquidy constraints. In year 2019, company understand and improving its current assets and reduces lialibity and achieve ideal current ratio | ||||||
| 2 | Inventory Ratio:- | |||||
| Inventory Ratio :- COGS/ Average inventory | ||||||
| Particular | 2017 | 2018 | 2019 | |||
| A | Opening Inventory | - | 2,829 | 3,035 | ||
| B | Closing Inventory | 2,829 | 3,035 | 3,749 | ||
| COGS | 47,904 | 49,462 | 50,144 | |||
| Average Inventory (A+B)/2 | 2,829 | 2,932 | 3,392 | |||
| Inventory Turnover ratio | 16.93 | 16.87 | 14.78 | |||
| The ideal current ratio of the company is 5 to 10. In the year 2017 the company is maintaining the ratio of 16.93. In year 2018, the Inventory ratio drops down to 16.87.The change is very minor and company needs to improve it a lot. This indicates bad performance of the company and may Inventory shortages at high demands. In year 2019, company understand and improving its ratio and reduces the inventory turnover ratio upto 14.78. | ||||||
| 3 | Debt Ratio:- | |||||
| Debt ratio :- Total Debt/ Total Equity | ||||||
| Particular | 2017 | 2018 | 2019 | |||
| A | Total Debt | 21,307 | 23,826 | 22,229 | ||
| B | Total Assets | 25,635 | 27,561 | 26,500 | ||
| Debt Ratio | 0.83 | 0.86 | 0.84 | |||
| The ideal current ratio of the company is 0.3 to 0.6. In the year 2017 the company is maintaining the Debt ratio of 0.83, which is higher than ideal ratio. In year 2018, the Debt ratio increases to 0.86.The change is very minor and company needs to improve it a lot. This indicates bad performance of the company and may lead to higher debt ratio in high and company assets fall short as compared to liabilities. In year 2019, company understand and improving its ratio and reduces the Debt ratio upto 0.84. | ||||||
| 4 | Profitability Ratio:- | |||||
| Gross profit ratio :- Gross profit/ Total Sales*100 | ||||||
| Particular | 2017 | 2018 | 2019 | |||
| A | Gross profit | 9,516 | 11,671 | 10,957 | ||
| B | Total Sales | 57,420 | 61,133 | 61,101 | ||
| Gross profit ratio | 16.57 | 19.09 | 17.93 | |||
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In the year 2017 the company is
maintaining the GP ratio of 16.57%. In year 2018, the GP Ratio
increases to 19.09.It shows the positive sign and company managed
to increase its revenue for the year. In year 2019, company revenue
drops and its GP ratio falls upto 17.93. The revenue of the company
is less as compared
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133 CHAPTER 3 Financial Statements and Ratio Analysis Common-size statement analysis A common-size income statement for Creek Enterprises' 2018 operations follows. Using the firm's 2019 income statem presented in Problem 3-16, develop the 2019 common-size income statement an compare it with the 2018 statement. Which areas require further analysis and investigation? P3-19 Creek Enterprises Common-Size Income Statement for the Year Ended December 31, 2018 Sales revenue ($35,000,000) Less: Cost of goods sold 100.0% 65.9 34.1% Gross profits Less: Operating expenses...
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Analysis for PepsiCo.
Financial Ratios for PepsiCo (2012) use the below information to
find
Liquidity Ratios:
- Current ratio:
- Quick ratio:
Leverage Ratios:
- Debt-to-total-assets ratio:
- Debt-to-equity ratio:
- Long-term debt-to-equity ratio:
- Times-earned-interest ratio: Profits before interest and
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Activity Ratios:
- Inventory turnover:
- Fixed assets turnover:
- Total assets turnover:
- Accounts receivable turnover:
Profitability Ratios:
- Gross profit margin:
- Operating profit margin:
-...
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available:
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$900,600.
(2) The firm expects to pay $35,600 in cash dividends in
2020.
(3) The firm wishes to maintain a minimum cash balance of
$30,000.
(4) Accounts receivable represent approximately 21% of annual
sales.
(5) The firm's ending...