Homework Check for the problems shown.

2. Calculate the liquidity ratios (at least two). Calculate the inventory turnover ratio, capital intensity, and the total asset turnover ratios. Calculate the debt ratio and debt-to-equity ratio. Discuss how you calculated these values.

Liquidity ratios:

- Current ratio = 3290= 1.60

2055

I took the current assets and divided by current liabilities to get the current ratio. The current ratio

- Quick ratio = 3290 -1760 = 1530 = 0.74

20552055

I took the current assets minus the inventory and divided by current liabilities to get the quick ratio.

- Inventory turnover ratio = 2246 = 1.27

1760

I took the Sales or Costs of Goods Sold and divided by Inventory to get the Inventory turnover ratio. It is used to measure the number of dollars of sales produced per dollar of inventory.

- Capital intensity= 9154=1.84

4980

I took the total assets and divided by the net sales to get capital intensity ratio which measures the dollars of the total assets needed to produce a dollar of sales.

- total asset turnover ratios= 4980= .54

9154

I took the net sales and divided by total assets to get the total asset turnover ratio. The asset turnover ratio measures the number of dollars of sales produced per dollar of total assets.

- debt ratio =5145 = .56

9154

I took the total debt and divided by total liabilities to get the debt ratio. The debt ratio is used to measure the percentage of total assets financed with debt.

- debt-to-equity ratio =5145 = 1.28

4009

I took the total liabilities and divided by the stockholder's equity to get the debt to equity ratio, that is used to measure the dollars of debt financing used for every dollar of equity financing.

3.Calculate the Profit Margin, Return on Assets, and the Return on Equity. Discuss how you calculated these values.

-Profit Margin = 1297 = .26

4980

I took the net income available to common stockholders and divided by sales to get the Profit Margin.The Profit Margin shows the firm's percentage of sales left after the firm's expenses are deducted.

-Return on Assets = 1297 = .14

9154

I took the net income available to common stockholders and divided by total assets to get the Return on Assets ratio. The Return on Assets measure the overall return on the firm's assets, the financial leverage and taxes.It is the net income earned per dollar of assets found on the balance sheet.

-Return on Equity = 1297 = .32

4009

I took the net income available to common stockholders and divided by Common stockholders' equity to get the Return on equity ratio. The Return on equity measures the return on the common stockholders' investment in the assets of the firm.

4. What are the weakness and strengths Using the information from questions 2, 3, and the industry benchmarks, identify and discuss areas of strengths and weakness (where applicable) revealed in Garners' financial statements.

Garner Competitor Garner's weakness or strengths

(industry benchmarks)

Current ratio = 1.602.00weakness

Quick ratio = 0.741.24weakness

Inventory turnover ratio= 1.272.50strengths

Capital intensity=1.842.00strengths

total asset turnover ratios = .54 .50strengths

debt ratio =.5650%weakness

- debt-to-equity ratio =1.281.00weakness

Profit Margin =.2618.75%strengths

Return on Assets = .149.38%strengths

Return on Equity =.3235.00%strengths

Garner's strengths over the competitor(Industry) consists of the Inventory turnover, Capital intensity,

Total asset turnover, Profit margin, Return on assets and Return on equity and Garner's weaknesses consist of Current ratio, Quick ratio, Debt ratio, And Debt-to-equity ratio.

Garner's Inventory turnover represents the number of times the inventory "turned over" during the period that is measured. Overall, a high inventory turnover indicates efficient operations. A low inventory turnover compared to the industry average and competitors means poor inventories management.

Garner's capital intensity is managing its inventories and turning them over during the period that is being measured at 1.84 were as the competitor is being measured at 2.00. A high capital intensity ratio for a company means that the company needs more assets than a company with lower ratio to generate equal amount of sales.

Garner's total asset turnover ratiostells how successfully the company is using its assets to generate revenue. If a company can generate more sales with fewer assets it has a higher turnover ratio which tells us that it is using its assets more efficiently.

Garner's profit margin indicates that the company can make a reasonable profit on sales, as long as it keeps overhead costs in control. The company performance level is better than it's competitor.

Garner's Return on Assetsis greater than the competitor which measures at 14% . the company has invested its assets to return a profit.

Garner's return on Equityless than the competitor by 3% that means the return of the profit of the competitor is better.

Garner's current ratioisat 1.60 that less than the competitor which is 2.00 and it shows that the competitor is expected to receive more cash inflows with the ability to pay off its debts. 2. Calculate the liquidity ratios (at least two). Calculate the inventory turnover ratio, capital intensity, and the total asset turnover ratios. Calculate the debt ratio and debt-to-equity ratio. Discuss how you calculated these values.

Liquidity ratios:

- Current ratio = 3290= 1.60

2055

I took the current assets and divided by current liabilities to get the current ratio. The current ratio

- Quick ratio = 3290 -1760 = 1530 = 0.74

20552055

I took the current assets minus the inventory and divided by current liabilities to get the quick ratio.

- Inventory turnover ratio = 2246 = 1.27

1760

I took the Sales or Costs of Goods Sold and divided by Inventory to get the Inventory turnover ratio. It is used to measure the number of dollars of sales produced per dollar of inventory.

- Capital intensity= 9154=1.84

4980

I took the total assets and divided by the net sales to get capital intensity ratio which measures the dollars of the total assets needed to produce a dollar of sales.

- total asset turnover ratios= 4980= .54

9154

I took the net sales and divided by total assets to get the total asset turnover ratio. The asset turnover ratio measures the number of dollars of sales produced per dollar of total assets.

- debt ratio =5145 = .56

9154

I took the total debt and divided by total liabilities to get the debt ratio. The debt ratio is used to measure the percentage of total assets financed with debt.

- debt-to-equity ratio =5145 = 1.28

4009

I took the total liabilities and divided by the stockholder's equity to get the debt to equity ratio, that is used to measure the dollars of debt financing used for every dollar of equity financing.

3.Calculate the Profit Margin, Return on Assets, and the Return on Equity. Discuss how you calculated these values.

-Profit Margin = 1297 = .26

4980

I took the net income available to common stockholders and divided by sales to get the Profit Margin.The Profit Margin shows the firm's percentage of sales left after the firm's expenses are deducted.

-Return on Assets = 1297 = .14

9154

I took the net income available to common stockholders and divided by total assets to get the Return on Assets ratio. The Return on Assets measure the overall return on the firm's assets, the financial leverage and taxes.It is the net income earned per dollar of assets found on the balance sheet.

-Return on Equity = 1297 = .32

4009

I took the net income available to common stockholders and divided by Common stockholders' equity to get the Return on equity ratio. The Return on equity measures the return on the common stockholders' investment in the assets of the firm.

4.Using the information from questions 2, 3, and the industry benchmarks, identify and discuss areas of strengths and weakness (where applicable) revealed in Garners' financial statements.

Garner CompetitorGarner's weakness or strengths

Current ratio = 1.602.00weakness

Quick ratio = 0.741.24weakness

Inventory turnover ratio= 1.272.50strengths

Capital intensity=1.842.00strengths

total asset turnover ratios = .54 .50strengths

debt ratio =.5650%weakness

- debt-to-equity ratio =1.281.00weakness

Profit Margin =.2618.75%strengths

Return on Assets = .149.38%strengths

Return on Equity =.3235.00%strengths

Garner's strengths over the competitor(Industry) consists of the Inventory turnover, Capital intensity,

Total asset turnover, Profit margin, Return on assets and Return on equity and Garner's weaknesses consist of Current ratio, Quick ratio, Debt ratio, And Debt-to-equity ratio.

Garner's Inventory turnover represents the number of times the inventory "turned over" during the period that is measured. Overall, a high inventory turnover indicates efficient operations. A low inventory turnover compared to the industry average and competitors means poor inventories management.

Garner's capital intensity is managing its inventories and turning them over during the period that is being measured at 1.84 were as the competitor is being measured at 2.00. A high capital intensity ratio for a company means that the company needs more assets than a company with lower ratio to generate equal amount of sales.

Garner's total asset turnover ratiostells how successfully the company is using its assets to generate revenue. If a company can generate more sales with fewer assets it has a higher turnover ratio which tells us that it is using its assets more efficiently.

Garner's profit margin indicates that the company can make a reasonable profit on sales, as long as it keeps overhead costs in control. The company performance level is better than it's competitor.

Garner's Return on Assetsis greater than the competitor which measures at 14% . the company has invested its assets to return a profit.

Garner's return on Equityless than the competitor by 3% that means the return of the profit of the competitor is better.

Garner's current ratioisat 1.60 that less than the competitor which is 2.00 and it shows that the competitor is expected to receive more cash inflows with the ability to pay off its debts.

I just a homework check. I did the work already.