Case Study 1

Ramstar Corporation Financial information for year 20XX is as follows:

	INCOME STATEMENT
	Net Sales	$10,372
	Cost of Goods Sold	$6,660
	Other Expenses	$2,183
	Depreciation	$317
	Earnings before interest and tax (EBIT)	$1,212
	Net Interest	$379
	Tax	$301
	Earnings	$532
	Dividends	$490
	BALANCE SHEET
		End of Year		Start of Year
	Cash and short-term securities	$535		$1,302
	Receivables	$1,202		$1,310
	Inventories	$1,289		$1,508
	Other Current Assets	$220		$256
	Total Current Assets	$3,246		$4,376
	Tangible fixed assets	$2,281		$2,597
	Other long-term assets	$6,160		$5,720
	Total Assets	$11,687		$12,694
	Short-term debt	$66		$688
	Payables	$2,356		$2,350
	Other current liabilities	$0		$66
	Total current liabilities	$2,422		$3,103
	Long-term debt and capital leases	$5,230		$4,946
	Other long-term liabilities	$1,577		$1,520
	Common shareholders' equity	$2,459		$3,124
	Total Liabilities	$11,687		$12,694
	Other Financial Information Share Price	$42		$50
	Earnings per share	$5		$6
	Dividends per share	$3		$2

1) Calculate the following ratios for Ramstar Corporation

1. a) Debt ratio
2. Debt-equity ratio
3. Times-interest-earned
4. Working Capital
5. Current ratio
6. Quick ratio
7. Sales to assets ratio
8. Days in inventory
9. Inventory turnover
10. Average collection period (days)
11. Receivables turnover