CALCULATING FINANCIAL RATIOS

The exercises in this section require you to calculate and interpret financial ratios using a set of financial statements.

Financial Ratios Exercise A: Carpenter Technologies

Carpenter Technologies (NYSE:CRS), headquartered in Reading, PA, develops, manufactures, and distributes cast/wrought and powder metal stainless steels and specialty alloys. Assume you are part of a commodity team that is evaluating financial ratios for the company. Calculate Account Payable turnover (APT), Account receivable turnover (ART), Asset turn over, Inventory turnover, and Cash to Cash Cycle (C2C). Calculate these ratios for this year, last year and last two years. How has the companys performance has changed?

What supply chain drivers and metrics might explain this difference in performance over the years? Please explain.