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Financial Ratios Please give an acceptable range for the ratio to be, in regards to a company like McDonalds in the fast food industry. Ratios
Financial Ratios
Please give an acceptable range for the ratio to be, in regards to a company like McDonalds in the fast food industry.
Ratios | Computation | Acceptable Range |
Current Ratio | = (Current Assets)(Current Liabilites) | |
Quick or Acid-test Ratio | = (Cash, Short-term Investments, and Net Receivables)(Current Liabilites) | |
Accounts Receivable Turnover | = (Net Sales)(Average Trade Receivables (net)) | |
Inventory Turnover | = (Cost of Goods Sold)(Average Inventory) | |
Asset Turnover | = (Net Sales)(Average Total Assets) | |
Profit Margin on Sales | = (Net Income)(Net Sales) | |
Return on Assets | = (Net Income)(Average Total Assets) | |
Return on Common Stock Equity | = (Net Income - Preferred Dividends)(Average Common Stockholders' Equity) | |
Earnings Per Share | = (Net Income - Preferred Dividends)(Weighted-average Number of Shares Outstanding) | |
Payout Ratio | = (Cash Dividends)(Net Income) | |
Debt to Assets Ratio | = (Total Liabilites)(Total Assets) | |
Times Interest Earned | = (Income Before Income Taxes and Interest Expense)(Interest Expense) | |
Book Value Per Share | = (Common Stockholders' Equity)(Outstanding Shares) |
If you want to answer a related question on solving for some of McDonald's financial ratios, go to the following link.
http://www.chegg.com/homework-help/questions-and-answers/financial-ratios-using-following-mcdonald-s-2-previous-years-financial-statements-income-s-q9220087
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