Question
Consolidated Analysis: Examine the financial ratios and information below for SportsWorld. (6 pts) SportsWorld Company Select Financial Information Ratio 2018 2017 2016 Liquidity Current 4.48x
- Consolidated Analysis: Examine the financial ratios and information below for SportsWorld.
(6 pts)
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SportsWorld Company Select Financial Information | ||||
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| Ratio |
| 2018 | 2017 | 2016 |
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| Liquidity | Current |
| 4.48x | 4.06x | 3.48x |
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| Quick |
| 1.47x | 1.18x | 0.96x |
| Efficiency | Average collection period |
| 16 days | 15 days | 9 days |
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| Inventory turnover |
| 1.2x | 1.2x | 1.3x |
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| Days payable outstanding |
| 11 days | 12 days | 8 days |
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| Fixed asset turnover |
| 9.74x | 9.09x | 8.85x |
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| Total asset turnover |
| 1.50x | 1.67x | 1.82x |
| Leverage | Debt ratio |
| 29.47% | 34.04% | 39.17% |
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| Long term debt to total capitalization |
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14.09% |
18.91% |
22.33% |
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| Times interest earned |
| 22.02x | 19.00x | 14.23x |
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| Fixed charge coverage |
| 4.59x | 4.47x | 4.25x |
| Profitability | Gross profit margin |
| 49.21% | 49.39% | 48.52% |
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| Operating profit margin |
| 16.05% | 15.86% | 15.52% |
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| Net profit margin |
| 9.73% | 9.62% | 9.41% |
| Returns | Return on equity |
| 7.96% | 7.91% | 7.89% |
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From the list of five general performance categories below, select what you consider to be the two strongest categories and the one weakest category:
PROFITABILITY EFFICIENCY LIQUIDITY LEVERAGE RETURNS
Two Strongest Categories: One Weakest Category
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DESCRIBE your rationale here:
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