RATIO ANALYSIS Liquidity Ratio Current Ratio Solvency Ratio Debt to Equity Ratio Debt to Assets Ratio 0.33 3.91 0.80 Profitability Ratio Gross Profit Margin Percentage Operating Profit Margin Percentage Net Profit Margin Percentage Return on Assets Return on Equity 21.09% 17.67% 13.80% 0.0426 0.209
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- Ratio Analysis Consider the following information. Required: Calculate the stockholder payout ratios. (Note: Round answers to two decimal places.) Calculate the stockholder profitability ratios. (Note: Round answers to two decimal places.)The average liabilities, average stockholders' equity, and average total assets are as follows: 1. Determine the following ratios for both companies, rounding ratios and percentagesto one decimal place: a. Return on total assets b. Return on stockholders' equity c. Times interest earned d. Ratio of total liabilities to stockholders' equity 2. Based on the information in (1), analyze and compare the two companies'solvency and profitability. Comprehensive profitability and solvency analysis Marriott International, Inc., and Hyatt Hotels Corporation are two major owners and managers of lodging and resort properties in the United States. Abstracted income statement information for the two companies is as follows for a recent year (in millions): Balance sheet information is as follows:Quiz 2: Solvency Debt-to-equity ratio Times interest earned ratio Debt service coverage ratio Cash flow from operations to capital expenditures ratio Profitability Return on assets ratio Return on sales ratio Asset turnover ratio Return on common stockholders equity ratio Leverage Earnings per share (EPS) Price/earnings (P/E) ratio Dividend payout ratio Dividend yield ratio A measure of a companys success in earning a return for the common stockholders. The relationship between a companys performance according to the income statement and its performance in the stock market. The ability of a company to remain in business over the long term. A variation of the profit margin ratio; measures earnings before payments to creditors. A companys bottom line stated on a per-share basis. The percentage of earnings paid out as dividends. The ratio of total liabilities to total stockholders equity. A measure of the ability of a company to finance long-term asset acquisitions with cash from operations. A measure of a companys success in earning a return for all providers of capital. The relationship between net sales and average total assets. The relationship between dividends and the market price of a companys stock. The use of borrowed funds and amounts contributed by preferred stockholders to earn an overall return higher than the cost of these funds. An income statement measure of the ability of a company to meet its interest payments. A statement of cash flows measure of the ability of a company to meet its interest and principal payments. How well management is using company resources to earn a return on the funds invested by various groups.
- Liquidity Ratios JRLs financial statements contain the following information: Required: 1. What is its current ratio? 2. What is its quick ratio? 3. What is its cash ratio? 4. Discuss JRLs liquidity using these ratios.Define each of the following terms:a. Liquid assetb. Liquidity ratios: current ratio; quick (acid test) ratioc. Asset management ratios: inventory turnover ratio; days sales outstanding (DSO);fixed assets turnover ratio; total assets turnover ratiod. Debt management ratios: total debt to total capital; times-interest-earned (TIE) ratioe. Profitability ratios: operating margin; profit margin; return on total assets (ROA);return on common equity (ROE); return on invested capital (ROIC); basic earning power (BEP) ratiof. Market value ratios: price/earnings (P/E) ratio; market/book (M/B) ratio; enterprise value/EBITDA ratio g. DuPont equation; benchmarking; trend analysish. “Window dressing” techniquesLiquidity Ratio Current Ratio Quick Ratio Leverage Ratio Debt to Total Assets Ratio Debt Equity Ratio Long-Term Debt to Equity Times Interest Earned Ratio Activity Ratios Inventory Turnover Fixed Assets Turnover Total Assets Turnover Accounts Receivable Turnover Average Collection Period Profitability Ratios Gross Profit Margin Operating Profit Margin Net Profit Margin Return on Total Assets (ROA) Return on Stockholder's Equity (ROE) Earnings Per Share (EPS) Price Earnings Ratio Please provide the numbers for the ratios.
- Return on sales RoA-Operational RoA-Total Management Performance Return on Equity Earnings Per Share P/E Ratio Dividends Yield Payout Ratio Debt Ratio Debt - Equity Ratio Time interest earned Defensive interval Ratio Cash flow to total debt Cash flow marginInventory Turnover Gross Profit Margin Operating Profit Margin Return on sales RoA-Operational RoA-Total Management Performance Return on Equity Earnings Per Share P/E Ratio Dividends Yield Payout Ratio Debt Ratio Debt - Equity Ratio Time interest earned Defensive interval Ratio Cash flow to total debt Cash flow marginRatio Industry Ratios GnG Ratios 1. Current Ratio 5.3 2. Acid Test Ratio 5.1 3. Gross Profit Ratio 30% 4. Net Income Margin 7.5% 5. Receivable Turnover Ratio 9 6. Return on Asset Ratio 12% 7. Debt to Asset Ratio 1:4 Interpretation and verbal analysis compared to industry ratios: 1. Liquidity 2. Profitability 3. Solvency Computations:
- Using the statements provided Calculate the following liquidity ratios: Current ratio Quick ratio Calculate the following asset management ratios: Average collection period Inventory turnover Fixed asset turnover Total asset turnover Calculate the following financial leverage ratios Debt to equity ratio Long-term debt to equity Calculate the following profitability ratios: Gross profit margin Net profit margin Return on assets Return on stockholders’ equity For example: you should present it like the text, or as:Gross margin = 1,933 divided by 8,689 = 22.2% A competitor of ACME has for the same time period reported the following three ratios: Current ratio 1.52Long-term debt to equity .25 or 25%Net profit margin .08 or 8% Given these three ratios only which company is performing better on each ratio? Also overall who would you say has the best financial performance and position. Support your answer.RATIO CALCULATIONS Assume the following relationships for the Brauer Corp.:Sales/Total assets 1.5xReturn on assets (ROA) 3.0%Return on equity (ROE) 5.0%Calculate Brauer’s profit margin and debt-to-capital ratio assuming the firm uses only debt and common equity, so total assets equal total invested capital.Solvency and Profitability Trend Analysis Addai Company has provided the following comparative information: 20Y8 20Y7 20Y6 20Y5 20Y4 Net income $1,078,700 $929,900 $781,400 $667,900 $566,000 Interest expense 366,800 334,800 289,100 220,400 175,500 Income tax expense 345,184 260,372 218,792 173,654 135,840 Total assets (ending balance) 8,226,651 8,779,231 6,276,721 6,620,869 5,020,826 Total stockholders' equity (ending balance) 2,543,681 3,148,667 2,003,133 2,553,135 1,531,881 Average total assets 8,502,941 7,527,976 6,448,795 5,517,391 4,722,930 Average stockholders' equity 2,846,174 2,575,900 2,278,134 2,042,508 1,808,307 You have been asked to evaluate the historical performance of the company over the last five years. Selected industry ratios have remained relatively steady at the following levels for the last five years:…
