Fin $336$ Intermediate Corporate Finance

Homework Lesson $6$

Using the MicroDrive $2001$ Financial Statements in the Lesson $6$ Supplements, calculate the following

ratios for MicroDrive $2001$ using your chapter $6$ lecture videos as your guide. Show the numbers that

you use in your calculation.

Liquidity $($Short$-$term Solvency$)$

Current Ratio: Current Assets$/$Current Liabilities $\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_$

Quick Ratio: $($CA $$ Inventory$)/$CL $\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_$

Activity

Total Asset Turnover $($TAT$)$: Annual Sales$/$Total Assets $\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_$

Fixed Asset Turnover $($FAT$)$: Annual Sales$/$Fixed Assets $\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_$

Receivables Turnover $($RTO$)$ Annual $($Credit$)$ Sales$/$ AVG Receivables $\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_$

Average Collection Period: $365/$RTO $\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_$

Inventory Turnover $($ITO$)$: COGS$/$ AVG Inventory $\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_$

Days in Inventory: $365/$ITO $\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_$

Leverage and Coverage

Debt Ratio: Total Debt$/$Total Assets $\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_$

Debt$-$to$-$Equity Ratio: Total Debt$/$Total Equity $\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_$

Equity Multiplier: Total Assets$/$Common Equity $\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_$

Times Interest Earned $($Interest Coverage$)$: EBIT$/$Interest Expense $\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_$

Profitability Ratios

Gross Profit Margin: $($Annual Sales$-$COGS$)/$Annual Sales $\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_$

Operating Profit Margin: EBIT $($NOI$)/$Annual Sales $\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_$

Net Profit Margin: NI $($common$)/$Annual Sales $\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_$

Return on Assets $($ROA$)$: NI $($common$)/$Total Assets $\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_$

Return on Common Equity $($ROE$)$: NI $($common$)/$Common Equity $\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_$

Market Value Ratios:

Price$-$Earnings $($PE$)$: Market price$/$Earnings$-$per$-$share $\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_$

Price$-$to$-$Book $($PB$)$: Market price$/$Book value$-$per$-$share $\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_$

Price$-$to$-$Sales $($PS$)$: Market price$/$Sales$-$per$-$share $\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_$

Dividend Yield: Dividend per share$/$Market price per share $\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_$

Earnings per share $($EPS$)$: NI available to CS$/$Shares outstanding $\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_$

Dividends per share $($DPS$)$: Dividends to CS$/$Shares outstanding $\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_$

Dividend Payout Ratio $($DPO$)$: Dividends to CS$/$NI available to CS$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_$

Retention Ration $($b$)$: $1-$DPO $\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_$