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Calculate the financial ratios below for the year 2014. Use the financial information given in the income statement and balance sheet below. Industry Average Financial
Calculate the financial ratios below for the year 2014. Use the financial information given in the income statement and balance sheet below. | |||||
Industry Average | |||||
Financial Ratios | 2012 | 2013 | 2014 | 2007 | |
Current ratio | 1.71X | 1.65X | 1.70X | ||
Quick ratio | .92X | .89X | .95X | ||
Average collection period | 60 days | 60 days | 65 days | ||
Inventory turnover | 4.20X | 3.90X | 4.50X | ||
Fixed asset turnover | 3.20X | 3.33X | 3.00X | ||
Total asset turnover | 1.40X | 1.35X | 1.37X | ||
Debt ratio | 59.20% | 61.00% | 60.00% | ||
Times interest earned | 4.20X | 3.70X | 4.75X | ||
Gross profit margin | 25.00% | 23.00% | 22.50% | ||
Operating profit margin | 12.50% | 12.70% | 12.50% | ||
Net profit margin | 6.10% | 6.00% | 6.50% | ||
Return on total assets | 8.54% | 8.10% | 8.91% | ||
Return on equity | 20.93% | 20.74% | 22.28% | ||
Income Statement for | Balance Sheet | ||||
Year Ended 12/31/14 | at 12/31/14 | ||||
Sales | $1,500,000 | Cash | $125,000 | ||
Cost of goods sold | 1,200,000 | Accounts receivable | 275,000 | ||
Gross Profit | $300,000 | Inventory | 325,000 | ||
Operating expenses | 100,000 | Current Assets | $725,000 | ||
Operating profit | $200,000 | Fixed assets (net) | $420,000 | ||
Interest expense | 72,000 | Total Assets | $1,145,000 | ||
Earnings before tax | 128,000 | Accounts payable | $150,000 | ||
Income tax (0.4) | 51,200 | Notes payable | 225,000 | ||
Accrued liabilities | 100,000 | ||||
Current Liabilities | 475,000 | ||||
Long-term debt | 400,000 | ||||
Total Liabilities | $875,000 | ||||
Equity | 270,000 | ||||
Net Income | $76,800 | Total Liabilities & Equity | $1,145,000 | ||
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