Use the formulas you learned about in the previous stage of the problem to answer the following questions. Given the value of total assets turnover, along with the level of total assets given, this means that Royval's sales must be $540,000.00 Given the value of DSO, along with the level of sales you already calculated, this means that Royval's receivables must be $36,000.00 Given the value of the inventory ratio, along with the level of sales you already calculated, this means that Royval's inventories must be $135,000.00 Given the value of the fixed assets turnover ratio, as well as the level of sales, this means that Royval's fixed assets must be equal to $108,000.00 Solving for cash yields a value of cash of and inventories, the level of current liabilities must be for Royval. Given the current ratio of 2.5 and values of cash, accounts receivable, Given the level of retained earnings, current liabilities, and long-term debt, along with the relationship between total assets and total liabilities ane equity, this means that Royval's common stock must be i Given the gross profit margin and the level of sales you have already calculated, this means that Royval has a cost of goods sold of
Use the formulas you learned about in the previous stage of the problem to answer the following questions. Given the value of total assets turnover, along with the level of total assets given, this means that Royval's sales must be $540,000.00 Given the value of DSO, along with the level of sales you already calculated, this means that Royval's receivables must be $36,000.00 Given the value of the inventory ratio, along with the level of sales you already calculated, this means that Royval's inventories must be $135,000.00 Given the value of the fixed assets turnover ratio, as well as the level of sales, this means that Royval's fixed assets must be equal to $108,000.00 Solving for cash yields a value of cash of and inventories, the level of current liabilities must be for Royval. Given the current ratio of 2.5 and values of cash, accounts receivable, Given the level of retained earnings, current liabilities, and long-term debt, along with the relationship between total assets and total liabilities ane equity, this means that Royval's common stock must be i Given the gross profit margin and the level of sales you have already calculated, this means that Royval has a cost of goods sold of
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Financial Ratios
A Ratio refers to a figure calculated as a reference to the relationship of two or more numbers and can be expressed as a fraction, proportion, percentage, or the number of times. When the number is determined by taking two accounting numbers derived from the financial statements, it is termed as the accounting ratio.
Return on Equity
The Return on Equity (RoE) is a measure of the profitability of a business concerning the funds by its stockholders/shareholders. ROE is a metric used generally to determine how well the company utilizes its funds provided by the equity shareholders.
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Transcribed Image Text:Suppose that Royval Inc has the following data:
Total assets turnover
Days sales outstanding
Inventory turnover ratio
Fixed assets turnover
Current ratio
Gross profit margin on sales:
Cash
Also suppose that Royval Inc has the following balance sheet:
Accounts receivable
Inventories
Fixed assets
Total assets
Assets
Sales
1.5
36.5 days
4
$360,000
5
2.5
20.00%
Balance Sheet
Liabilities
Current Liabilities
Long-term debt
Common stock
Retained earnings
Total Liabilities and equity
Cost of goods sold
$104,000
$96,000
Transcribed Image Text:Use the formulas you learned about in the previous stage of the problem to answer the following questions.
Given the value of total assets turnover, along with the level of total assets given, this means that Royval's sales must be $540,000.00
Given the value of DSO, along with the level of sales you already calculated, this means that Royval's receivables must be $36,000.00
Given the value of the inventory ratio, along with the level of sales you already calculated, this means that Royval's inventores must be
$135,000.00. Given the value of the fixed assets turnover ratio, as well as the level of sales, this means that Royval's fixed assets must
be equal to $108,000.00
Solving for cash yields a value of cash of
and inventories, the level of current liabilities must be
for Royval. Given the current ratio of 2.5 and values of cash, accounts receivable,
Given the level of retained earnings, current liabilities, and long-term debt, along with the relationship between total assets and total liabilities and
equity, this means that Royval's common stock must be
Given the gross profit margin and the level of sales you have already calculated, this means that Royval has a cost of goods sold of
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