| Chegg.com

Net Profit Ratio = Net Income / Sales

Net Profit Ratio = 7 / 650

Net Profit Ratio = 1.077%

Net Profit Ratio is positive which shows that company is earning profit.

Current Ratio = Current Assets / Current Liabilities

Current Ratio = 333 / 215

Current Ratio = 1.5488

Current Ratio higher than 1 shows that firm is able to repay its current liabilities using current assets.

Quick Ratio = (Current Assets - Inventories) / Current Liabilities

Quick Ratio = (333 - 128) / 215

Quick Ratio = 0.9535

Quick Ratio less than 1 shows that firm is not able to repay its current liabilities using quick assets.

Assets to Sales Ratio = Total Assets / Sales

Assets to Sales Ratio = 715 / 650

Assets to Sales Ratio = 1.10

As the Assets to Sales Ratio is higher than 1, company is utilizing its assets fully.

Yea r 200 3 2. Based on the information provided above, An Analyst compiled the following information of that firm, which is currently rated "BBB". Ratio Analysis of Benchmark for Industry average 3 Curren t ratio Quic k Ratio 1.5 Inventor y turnover ratio 6 Avg. collectio n period Gross Profit/sale 45 S Net profit/sale 0.16 3.5 Discuss whether that firm is performing better than industry average or not. (3 Marks) S Debt to 0.04 equit y ratio Interest coverag e ratio 0.7 Fixed charge s ratio 1.1 Yea r 200 3 2. Based on the information provided above, An Analyst compiled the following information of that firm, which is currently rated "BBB". Ratio Analysis of Benchmark for Industry average 3 Curren t ratio Quic k Ratio 1.5 Inventor y turnover ratio 6 Avg. collectio n period Gross Profit/sale 45 S Net profit/sale 0.16 3.5 Discuss whether that firm is performing better than industry average or not. (3 Marks) S Debt to 0.04 equit y ratio Interest coverag e ratio 0.7 Fixed charge s ratio