HW 1 301 F 20.docx 4a. Compute the firm's Profit Margin for the most recent fiscal year. (2 points) 4b. Interpret the Profit Margin you just calculated. What does this number mean? (2 points) 5. Compute the firm's Return on Assets (ROA) for the most recent fiscal year. (2 points) 6. Compute the firm's Return on Equity (ROE) for the most recent fiscal year. (2 points) Peer Group Average Ratios Current Quick Cash Ratio 1.704 1.124 0.500 Dillards, Inc. (DDS) Income Statement Sales Cost Of Goods Gross Profit Selling & Admin Expenses Depreciation Earnings Before Interest & Taxes Non-Operating Income Interest Expense Pretax Income Income Taxes Net Income 1/31/20 6,343 4.236 2,107 1,716 224 167 13 46 134 23 111 1/31/19 6,503 4.292 2.212 1.718 220 268 -8 53 208 38 170 Total Debt LTD Ratio Debt-Equity Equity Multiplier Times Interest Earned Cash Coverage 0.673 0.541 1.997 4.870 12.649 24.335 1/31/20 1/31/19 277 46 1,465 60 1,848 1,458 76 3,430 124 50 1,528 69 1,771 1,587 3,184 3,431 Asset Management Inventory Turnover Days' Sales in Inventory Receivables Tumover Days' Sales in Receivables Asset Turnover 4.509 83.827 54.856 10.553 1.190 Balance Sheet Assets Cash & Equivalents Receivables Inventories Other Current Assets Total Current Assets Net Property & Equipment Other Non-Current Assets Total Assets Liabilities Accounts Payable Accrued Expenses Other Current Liabilities Total Current Liabilities Long-Term Debt Other Non-Current Liabilities Total Liabilities Shareholders Equity Common Stock (Par) Capital Surplus Profitability Profit Margin EBIT Margin Return on Assets Return on Equity 0.053 0.062 0.059 0.265 893 0 23 931 566 310 1,807 921 0 12 934 566 959 1,753 1 952 1 949 Sheet1 Retained Earnings Other Equity Treasury Stock Total Shareholder's Equity Total Liabilities & Equity 4,556 -31 3,855 1.623 3,430 4.458 -13 3,717 1,678 3,431 Other Data Capital Expenditures 73 1) Net Working Capital = Total Current Asset- Total Current Liability Net Working Capital for 2019 = 1771-934 = 837 Net Working Capital for 2020 = 1848-931 = 917 2) Free cash flow of 2020 = Net Income + Interest Expense + Non Cash Expense (Depreciation) - Net Working Capital - CAPEX 111+46+224-917-1458 = -2057 3A) Total Asset Turnover = Net Sales/Average Total Assets = 6343/3430.5 1.8490 3B) Total Asset Turnover is 1.8490. It shows how effectively companies are using their asset to generate sales. The higher the ratio, the better the performance of a company to generate sales using its own assets, Stakeholders prefer higher Asset turnover ratio and term it as favorable. It is also on used to compare the performance of two different rth companies in the same group. S P