Mini-Case: Bowden Brake Service

Industry Bowden Brake Service

Current ratio : 1.4 :1 2.6

- Bowden current ratio means that the company has high liquidity and has less risk .

Quick Ratio : 0.7:1 0.53

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Debt ratio 1.8:1 0.75

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Debt-to-net worth ratio 1.9:1 3

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Average inventory Turnover n/a 4.16

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Average Collection Period 21.22 days 4.67=5

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Net sales to Total Assets 2.8 percent 1.5:1

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Net sales-to-Working Capital 17.2 percent 7.5%

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Net profit on sales 9.0 percent 7.7%

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Net profit to Equity 22.2 percent 46.2%

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Use the above industry statistics to explain and interpret what these ratios mean.

The ratios to calculate and explain what they mean based on the information above are:

Current Ratio, Quick Ratio, Debt Ratio, Debt-to-Net Worth Ratio, Average Inventory, Average Collection Period Ratio, Net Sales to Total Assets Ratio, Net Sales to Working Capital Ratio, Net Profit on Sales Ratio and Net Profit to Equity Ratio