I only need :
1. Receivables turnover
2.Inventory turnover
3.Current ratio
4.Quick ratio
5.Debt to total assets
6.Times interest earned
Case 2- Wizard Industries For the attached case study, calculate and describe what the ratios tell how the business operates. profit margin return on assets (inwestment) return on equity receivables turnover average collection period Inventory turnover current ratio total asset turnover . quick ratio debt to total assets times interest earned Which ratio(s) is most important and wtyy? What is leveraging? Is there such thing as too much leveraging? Do companies need to leverage Would you grant credit to the sales team?(Your answer must provide reasoning from KYC, KYI, and ratios). If you grant additional credit, what business product and why? If you have declined the sales team additional credit, why? What options would you offer them? You are the manager of a credit department. The sales team has presented a large order from a new purchaser, Wizard Industries. For approximately 12 years. Wizard has been installing security and water sprinkler systems in office buildings. The salespeople have been well trained, as they have also presented you with the followin; financial statements and industry ratios (from your files). In their report they note that sales have increased in the last two years due to Wizard's more aggressive selling approach. The sales team is eager for you to grant credit to Wizard Industries. Of course, you must do a complete analysis notlag any ratios that are cause for concern or require a further explanation. What is your recommendation? Do you grant credit? WIZARD INDUSTRIES Income Statements Year Ended 20XX 20XW 20XV Sales (all on credit) $1,605,100 $1,841,300 $ 1,542,700 Cost of goods sold 1.258,900 1.397.400 1.174.800 Gross profit 346,200 443.900 367.900 Selling and administrative expense 265,650 256,850 294,200 Amortization 14,000 14,400 16.000 66,550 172,650 57.700 Operating profit Interest expense 65.100 50.550 50.100 Earnings before taxes 1.450 122.100 7,600 Taxes 350 27.100 2,200 Earnings available to common shareholders $ 1.100 $ 95,000 $ 5,400 Dividends declared $ 70,000 $ 65,000 $ 60,000 WIZARD INDUSTRIES Balance Sheet December 31, ZOXX 20XW 20XV Assets Cash $ 14,900 S 24,700 $11.500 Marketable securities 7,000 7,000 7.000 Accounts receivable 410,800 361.800 297,300 256.600 330,000 289.900 Inventory Prepaid expenses 5.200 800 5.500 Total current assets 694,500 724,300 611.200 Net plant and equipment 162.000 172.900 184,300 Goodwill 25,400 28,200 30.600 Total assets $881.900 $925,400 $826,100 Liabilities and Shareholders' Equity $145.900 $196,700 $209,700 254,000 202.000 169.000 Accounts payable Bank loan Accrued expenses Total current liabilities 3.700 22.700 14.400 403.600 422.400 393.100 225,800 181.600 141.000 Long-term debt 629,400 604,000 534,100 Total liabilities 14.000 14.000 14.000 238.500 307.400 278,000 Common stock Retained earnings Total shareholders' equity Total liabilities and shareholders' equity 25 2.500 321.400 292.000 S881,900 $925.400 $826,100
