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Compute each of the following ratios for 2016 and 2017 and indicate whether each ratio was getting better or worse from 2016 to 2017 and

Compute each of the following ratios for 2016 and 2017 and indicate whether each ratio was getting "better" or "worse" from 2016 to 2017 and was "good" or "bad" compared to the Industry Avg for 2016. (round all numbers to 2 digits past the decimal place)

Type your answers in the table and submit this document.

Ratios

2016

2017

Enter Better or Worse

Industry Avg

Enter "Good" or "Bad" compared to Industry Avg

Profit Margin

1

11

21

0.11

31

Current Ratio

2

12

22

1.90

32

Quick Ratio

3

13

23

1.12

33

Return on Assets

4

14

24

.26

34

Debt to Assets

5

15

25

.55

35

Receivables turnover

6

16

26

18.00

36

Avg. collection period*

7

17

27

21.20

37

Inventory Turnover**

8

18

28

8.25

38

Return on Equity

9

19

29

0.25

39

Times Interest Earned

10

20

30

8.15

40

*Assume a 360 day year

**Inventory Turnover can be computed 2 different ways. Use the formula listed in the text

(the one the text indicates many credit reporting agencies generally use)

Use the following information to answer the questions below:

note: all sales are credit sales

Income Stmt info:

2016

2017

Sales

$ 975,000

$ 1,072,500

less Cost of Goods Sold:

325,000

346,125

Gross Profit

650,000

726,375

Operating Expenses

575,000

609,500

Earnings before Interest & Taxes

75,000

116,875

Interest exp

25,000

31,000

earnings before Taxes

50,000

85,875

Taxes

20,000

34,350

Net Income

$ 30,000

$ 51,525

Balance Sheet info:

12/31/2016

12/31/2017

Cash

60,000

$ 63,600

Accounts Receivable

80,000

$ 84,000

Inventory

110,000

$ 126,500

Total Current Assets

$ 250,000

$ 274,100

Fixed Assets (Net)

$ 300,000

$ 312,000

Total Assets

$ 550,000

$ 586,100

Current Liabilities

$ 130,000

$ 149,500

Long Term Liabilities

$ 150,000

$ 170,000

Total Liabilities

$ 280,000

$ 319,500

Stockholder's Equity

$ 270,000

$ 266,600

Total Liab & Equity:

$ 550,000

$ 586,100

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