1. Calculating ratios using Excel Ratio analysis using Excel Quantitative analysis in finance heavily relies on the data from ratio analysis. The process of working with multiple financial statements can be daunting but Excel can help you compute financial ratios-which you can then use to evaluate the financial health of the company. The most recent data from the annual balance sheets of Khoshjamal Corporation. are given in the balance sheet and the income statement given below: 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 A Balance Sheet Assets Current assets: Cash Accounts receivable Inventories Total current assets Net fixed assets: Net plant and equipment Total assets B $1,660 608 1,782 4,050 4,950 9,000 C Liabilities & Equity Current liabilities: Accounts payable Accruals Notes payable Total current liabilities Long-term bonds Total debt Common equity Common stock Retained earnings Total common equity Total liabilities and equity D E F $0 0 3,037 3,037 3,713 6,750 1,463 787 2,250 9,000 Income Statement Net Sales Operating costs except depreciation and amortization Depreciation and amortization Total Operating Costs Operating Income (or EBIT) Less: Interest Earnings before taxes (EBT) Less: Taxes (40%) Net Income G 2,000 1,040 80 1,120 880 114 766 306 460 Using the data you have and the formula you will be using in ratio analysis, solve for the ratios using Excel commands: A B 1 Ratio Formula Excel Solution 2 3 Current ratio Current Assets / Current Liabilities 4 Inventory turnover ratio Sales / Inventories 5 Sales / Net Fixed Assets 6 Sales/ Total Assets 7 Total Debt / Total Assets 8 EBIT / Interest Expense 9 Fixed assets turnover ratio Total assets turnover ratio Debt ratio Times interest ratio