Question
Modern Appliances Corporation has reported its financial results for the year ended December 31, 2011. Using the information from the financial statements, comprehensive ratio analysis
Modern Appliances Corporation has reported its financial results for the year ended December 31, 2011.
Using the information from the financial statements, comprehensive ratio analysis for Modern Appliances Corporation.
a. Calculate these liquidity ratios: current and quick ratios.
b. Calculate these efficiency ratios: inventory turnover, accounts receivable turnover, DSO.
c. Calculate these asset turnover ratios: total asset turnover, fixed asset turnover.
d. Calculate these leverage ratios: total debt ratio, debt-to-equity ratio, equity multiplier.
e. Calculate these coverage ratios: times interest earned, cash coverage.
f. Calculate these profitability ratios: gross profit margin, net profit margin, ROA, ROE.
g. Use the DuPont identity, and after calculating the component ratios, compute the ROE for this firm.
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