2 Problem 4 Financial Ratio Analysis 3 Using Google's Income Statement and Balance Sheet on the next sheets: 1. Calculate the financial ratios below: Show your work for the most points, wrong answer equals 0 Points. 4 5 6 7 8 a. Cash Ratio = Cash + Cash Equivalents = cents Cash to S1 current liability Current Liabilities 9 10 11 Cash Ratio 12 13 b. Current Ratio Current Assets_= Dollar and cents Current Assets to S1 Current Liability Current Liabilities 15 16 Current Ratio 17 18 c. Quick Ratio = Cash + Short-term investments (marketable securities) + Accounts Receivable = S and cents to Current Liabilities S Liability 19 20 Quick Ratio = 3 4 d. Debt-to-Equity ratio = $or cents to $1 Equity Total Liabilities Stockholders' Equity 5 26 27 Debt-to-Equity Ratio 28 29 e. Return on Assets (ROA) = Net Income Total Assets 30 31 32 Return on Assets (ROA) 33 34 f. Inventory turnover ratio = Cost of Goods Sold = Turnover of Inventory per year. Inventory 35 36 37 Inventory turnover ratio = times 38 39 g. Return on equity ratio = Net Income % earnings on Stockholders' equity Stockholders' Equity 40 42 Return on Equity (ROE) 28 29 e. Return on Assets (ROA) = Net Income Total Assets 30 31 32 Return on Assets (ROA) 33 34 f. Inventory turnover ratio = Cost of Goods Sold = Turnover of Inventory per year. Inventory 35 36 37 Inventory turnover ratio = times 38 39 g. Return on equity ratio = Net Income % earnings on Stockholders' equity Stockholders' Equity 40 41 42 Return on Equity (ROE) h. Net Profit Margin Net Income_- cents profit on SI sale or percentage of the sale. Net Sales Revenue 46 Net Profit Margin 48 4 5 6 8 $ 202,000.00 $98,560.00 $9,800.00 $9,502.00 $63,520.00 $49,580.00 $21,250.00 $25,700.00 Sales Cost of Goods Sold 7 Depreciation Expense Interest Expense Current Assets 10 Net Fixed Assets Current Liabilities 12 Long-Term Debt 13 The corporate tax rate is 21% 15 9 11 14 16 17 Green Company Income Statement December 31, 2019 18 19 20 21 Sales Cost of Goods Sold Depreciation Expense Earnings before interest and taxes Interest Expense Taxable income Income Tax Expense NET Income $ 202,000.00 ($98,560.00) ($9,800.00) $93,640.00 $9,502.00) $84,138.00 ($17,668.98) $66.469.02 24 20 2 Problem 4 Financial Ratio Analysis 3 Using Google's Income Statement and Balance Sheet on the next sheets: 1. Calculate the financial ratios below: Show your work for the most points, wrong answer equals 0 Points. 4 5 6 7 8 a. Cash Ratio = Cash + Cash Equivalents = cents Cash to S1 current liability Current Liabilities 9 10 11 Cash Ratio 12 13 b. Current Ratio Current Assets_= Dollar and cents Current Assets to S1 Current Liability Current Liabilities 15 16 Current Ratio 17 18 c. Quick Ratio = Cash + Short-term investments (marketable securities) + Accounts Receivable = S and cents to Current Liabilities S Liability 19 20 Quick Ratio = 3 4 d. Debt-to-Equity ratio = $or cents to $1 Equity Total Liabilities Stockholders' Equity 5 26 27 Debt-to-Equity Ratio 28 29 e. Return on Assets (ROA) = Net Income Total Assets 30 31 32 Return on Assets (ROA) 33 34 f. Inventory turnover ratio = Cost of Goods Sold = Turnover of Inventory per year. Inventory 35 36 37 Inventory turnover ratio = times 38 39 g. Return on equity ratio = Net Income % earnings on Stockholders' equity Stockholders' Equity 40 42 Return on Equity (ROE) 28 29 e. Return on Assets (ROA) = Net Income Total Assets 30 31 32 Return on Assets (ROA) 33 34 f. Inventory turnover ratio = Cost of Goods Sold = Turnover of Inventory per year. Inventory 35 36 37 Inventory turnover ratio = times 38 39 g. Return on equity ratio = Net Income % earnings on Stockholders' equity Stockholders' Equity 40 41 42 Return on Equity (ROE) h. Net Profit Margin Net Income_- cents profit on SI sale or percentage of the sale. Net Sales Revenue 46 Net Profit Margin 48 4 5 6 8 $ 202,000.00 $98,560.00 $9,800.00 $9,502.00 $63,520.00 $49,580.00 $21,250.00 $25,700.00 Sales Cost of Goods Sold 7 Depreciation Expense Interest Expense Current Assets 10 Net Fixed Assets Current Liabilities 12 Long-Term Debt 13 The corporate tax rate is 21% 15 9 11 14 16 17 Green Company Income Statement December 31, 2019 18 19 20 21 Sales Cost of Goods Sold Depreciation Expense Earnings before interest and taxes Interest Expense Taxable income Income Tax Expense NET Income $ 202,000.00 ($98,560.00) ($9,800.00) $93,640.00 $9,502.00) $84,138.00 ($17,668.98) $66.469.02 24 20