2) Ratios Based on the information given in picture #1, complete the following ratios for the last TWO years and indicate whether the trend is favorable or unfavorable. Note percentages and times should be to one decimal place (e.g. 14.8%; 5.8x)Profitability Ratios Current Yr. Prior Yr. Fav/Unfav.Gross Margin (%){Gross Income/Sales Revenue} Profit Margin (%){Net income/ Sales Revenue} Return on Assets (%){Net Income/ Average Total Assets} 2- RatiosComplete the following ratios for the last TWO years and indicate whether the trend is favorableor unfavorable. Note percentages and times should be to one decimal place (e.g. 14.8%; 5.8X).FAVORABLECurrent Year(G)Prior Year(C)(UNFAVORABLE)Profitability RatiosGross Margin (%){Gross Income / Sales Revenue}Profit Margin (%){Net Income / Sales Revenue}Return on Assets (%){Net income / Average Total Assets} 1- Key Statistics: (OMIT ALL ZEROS 000): if none, leave blankIncome StatementPrior Year623 MCurrent YearIncrease(Decrease)2651M+ £2028% 325.81%.Sales/Revenue926m705.22%.Cost of Goods Sold1725 M507m m$1218239.571.Gross IncomeNet IncomeEnd ofIncrease (Decrease)S.End ofBalance SheetCurrent YearPrior Year4295M9 04 m +$339l 375.17Cash & Short-term investmentsTotal Accounts Receivable295M145.837.120m +$175Invehtories1,OSIM 360s 343.01%.126m rý122 96.83%.Total Current Assets4656mNet Property, Plant & Equipment 24 8mIntangible Assets35MN IATotal Assets5,298M129 0m tf4008 310.701.Accounts Payable3507.Total Current Liabilities126 0m1437m334 m r926 277.25.456m 9 215.13%.834m 3027 362.951.Total LiabilitiesTotal Shareholders' Equity3861 m*$3027Asset Composition:End of Current YearLargest Assets: (from above)Cah + short termnrestmentstutal accountse_receivableret property,% of Total Assets4,29529524881.077.S. 57%.Plaht'iequip ment4.68 7.

Ratio analysis is the analysis in which ratios are computed to compare the results of different…

2- Ratios - Complete the following ratios for the last TWO years and indicate whether the trend is favorable or unfavorable. Note percentages and times should be to one decimal place (e.g. 14.8%; 5.8X). FAVORABLE Current Year (G) Prior Year (C) (UNFAVORABLE) Profitability Ratios Gross Margin (%) {Gross Income / Sales Revenue} Profit Margin (%) {Net Income / Sales Revenue} Return on Assets (%) {Net income / Average Total Assets}

2- Ratios - Complete the following ratios for the last TWO years and indicate whether the trend is favorable or unfavorable. Note percentages and times should be to one decimal place (e.g. 14.8%; 5.8X). FAVORABLE Current Year (G) Prior Year (C) (UNFAVORABLE) Profitability Ratios Gross Margin (%) {Gross Income / Sales Revenue} Profit Margin (%) {Net Income / Sales Revenue} Return on Assets (%) {Net income / Average Total Assets}

Fundamentals of Financial Management (MindTap Course List)

15th Edition

ISBN:9781337395250

Author:Eugene F. Brigham, Joel F. Houston

Publisher:Eugene F. Brigham, Joel F. Houston

Chapter4: Analysis Of Financial Statements

Section: Chapter Questions

Problem 24P: Income Statement for Year Ended December 31, 2018 (Millions of Dollars) Net sales 795.0 Cost of...

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Income Statement for Year Ended December 31, 2018 (Millions of Dollars) Net sales 795.0 Cost of goods sold 660.0 Gross profit 135.0 Selling expenses 73.5 EBITDA 61.5 Depreciation expenses 12.0 Earnings before interest and taxes (EBIT) 49.5 Interest expenses 4.5 Earnings before taxes (EBT) 45.0 Taxes (40%) 18.0 Net income 27.0 a. Calculate the ratios you think would be useful in this analysis. b. Construct a DuPont equation, and compare the companys ratios to the industry average ratios. c. Do the balance-sheet accounts or the income statement figures seem to be primarily responsible for the low profits? d. Which specific accounts seem to be most out of line relative to other firms in the industry? e. If the firm had a pronounced seasonal sales pattern or if it grew rapidly during the year, how might that affect the validity of your ratio analysis? How might you correct for such potential problems?
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