ABS GMA Ratio Analysis 2010 2009 2008 2007 2010 2009 2008 2007 Liquidity Management Working capital Current ratio Quick ratio 3,885.7 2,802.1 1,585.5 2.444.9 5,786.1 6,126.0 5,030.3 4,157.9 1.36 1.33 1.19 1.38 3.70 3.60 3.23 2.52 1.35 1.31 1.16 1.35 3.65 3.55 3.19 2.49 Asset Management AR Turnover ratio Average collection period Inventory Turnover ratio Inventory conversion period Asset Turnover ratio 1.06 1.05 1.05 1.00 1.03 1.08 0.96 1.00 344.71 346.70 349.28 365.00 352.77 338.15 380.43 365.00 90.62 65.15 59.07 55.99 43.78 44.20 50.07 50.79 4.03 5.60 6.18 6.52 8.34 8.26 7.29 7.19 0.75 0.65 0.66 0.66 0.92 0.89 0.87 0.87 Debt Management Times interest earned ratio Debt to equity ratio Equity multiplier 4.66 3.00 3.17 4.70 975.58 423.76 373.25 143.52 1.20 1.16 1.18 0.82 0.25 0.26 0.28 0.37 2.18 2.17 2.01 1.82 1.25 1.27 1.32 1.37

Indicate the effect of the transactions listed in the following table on total current assets, current ration, and net income. Use (+) to indicate an increase, (-) to indicate a decrease, and (0) to indicate either no effect or an indeterminate effect. Be prepared to state any necessary assumptions and assume an initial current ratio of more than 1.0. A fixed asset is sold for more than book value.

The company’s profitability on each dollar invested in assets is represented by which of the following ratios: a. Profit margin. b. Asset turnover. c. Return on assets. d. Return on equity.

VII. Direction: Compute and interpret. The following comparative financial statements are provided by Avatar Industries. You were asked to compute the different financial ratios and provide your interpretations with regards to profitability, efficiency, liquidity and solvency of the company. Use the Answer Sheet template below to input your answer and solution. AVATAR INDUSTRIES AVATAR INDUSTRIES Comparative Statement of Financial Position For the years 2019 and 2018 Comparative Income Statement For the years 2019 and 2018 2019 2018 2019 2018 ASSETS Current Assets: Sales P200,000 P210,000 Cash & Cash Equivalent P65,000 P70,000 Sales Returns and Allowances 40,000 25,000 Accounts Receivable 40,000 35,000 Net Sales 160,000 185,000 Marketable Secuities 40,000 35,000 Cost of Goods Sold 100,000 115,625 Inventory 100,000 80,000 Gross Profit 60,000 69,375 Total Current Assets 220,000 200,000 160,000 P445,000 P380,000 245,000 Operating Expenses: Fixed Assets Selling Expenses 22,000 25,000 Total…

Which of the following ratios best measures the profitability of a company?    a) Return on equity b) Gross margin c) Current ratio d) Net operating asset turnover

Which of the following is the correct formula for calculating rate of return on total​ assets?   A. ​(Net income minus− Interest​ expense) / Average total asset   B. Total equity​ / Total assets   C. ​(Net income​ + Interest​ expense) / Average total assets   D. ​(Net income minus− Interest​ expense) / Total assets

VII. Direction: Compute and interpret. The following comparative financial statements are provided by Avatar Industries. You were asked to compute the different financial ratios and provide your interpretations with regards to profitability, efficiency, liquidity and solvency of the company. Use the Answer Sheet template below to input your answer and solution. AVATAR INDUSTRIES AVATAR INDUSTRIES Comparative Statement of Financial Position For the years 2019 and 2018 Comparative Income Statement For the years 2019 and 2018 2019 2018 2019 2018 ASSETS Current Assets: Sales P200,000 P210,000 Cash & Cash Equivalent P65,000 P70,000 Sales Returns and Allowances 40,000 25,000 Accounts Receivable 40,000 35,000 Net Sales 160,000 185,000 Marketable Securities 40,000 35,000 Cost of Goods Sold 100,000 115,625 Inventory 100,000 80,000 Gross Profit 60,000 69,375 Total Current Assets 245,000 220,000 Operating Expenses: Fixed Assets 200,000 160,000 Selling Expenses 22,000 25,000 Total Assets P445,000…

The DuPont equation shows the relationships among asset management, debt management, and -Select- ROE = Profit margin x Total assets turnover x Equity multiplier Ratio analysis is important to understand and interpret financial statements; however, sound financial analysis involves more than just calculating and interpreting numbers. -Select- Quantitative Problem: Rosnan Industries' 2019 and 2018 balance sheets and income statements are shown below. Balance Sheets: Cash and equivalents Accounts receivable Inventories Total current assets Net plant and equipment Total assets Accounts payable Accruals Notes payable Total current liabilities Long-term debt Common stock Retained earnings Total liabilities and equity Sales Operating costs excluding depreciation EBITDA Depreciation and amortization EBIT Interest EBT Taxes (25%) Net income Income Statements: Dividends paid Addition to retained earnings Shares outstanding Price WACC 2019 $100 Ś 85 275 300 375 350 750 $ 735 2,000 1,490 $2,750…

a)Please calculate all the ratios of companies - Profitability ratios(Profit margin, Return on assets , Return on equity) , Asset utilization ratios (Receivables turnover, Average collection period, Inventory turnover, Fixed asset turnover, Total asset turnover) Liquidity ratios (Current ratio, Quick ratio) & Debt utilization ratios (Debt total assets, Times interest earned, Fixed charge coverage) b) Calculate all your ratios in and Excel File. You need to show all your calculations in excel file but use the calculated value in your main report. c) Discuss each of the ratios for two years and explain their implications for the company. Analyze the ratios that you have calculated d) Use graphs, charts in your analysis.