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Magna International Inc. is a leading global supplier of technologically advanced automotive components, systems, and modules. Selected

Question:

Magna International Inc. is a leading global supplier of technologically advanced automotive components, systems, and modules. Selected financial information (in US$ millions) follows:

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Instructions

a. Calculate the gross profi t margin, profi t margin, and current ratio for each year.

b. Comment on whether the ratios have improved or deteriorated over the three years.

Assume you are thinking about investing in Magna International Inc. What other information would be useful in assessing these ratios?

Transcribed Image Text:

2017 2016 $36,445 31,123 2,031 10,163 8,695 2015 Sales Cost of goods sold Profit Current assets Current liabilities $38,946 33,258 2,206 11,220 9,169 $32,134 27,559 2,013 11,144 7,276

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Answer rating: 42% (7 reviews)

a US dollars in millions 2017 2016 2015 Gross profit margin 146 38946 33258 38946 146 36445 31123 36...View the full answer


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Related Video

The current ratio is a financial ratio that measures a company\'s ability to pay its short-term obligations with its short-term assets. It is calculated by dividing a company\'s current assets by its current liabilities. The formula for calculating the current ratio is: Current Ratio = Current Assets / Current Liabilities Current assets are assets that can be converted to cash within one year, while current liabilities are debts that are due within one year. A current ratio of 1:1 or greater is generally considered good, as it indicates that a company has enough current assets to cover its current liabilities. A current ratio of less than 1:1 may suggest that a company may have difficulty meeting its short-term obligations. It\'s important to note that the current ratio is just one of many financial ratios that can be used to assess a company\'s financial health. It should be used in conjunction with other financial ratios and qualitative factors to make informed decisions about investing or lending to a company.

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