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Please clearly explain the formulas in excel for: Debt Ratio, Return on Common Equity, & Market/Book Ratio. I can't figure these out. If you can't
Please clearly explain the formulas in excel for: Debt Ratio, Return on Common Equity, & Market/Book Ratio.
I can't figure these out. If you can't see all the numbers, please use the scroll bar at the bottom.
Ratio | Industry Average | Actual 2018 | Actual 2019 |
Current Ratio | 1.80 | 1.84 | 1.04 |
Quick Ratio | 0.70 | 0.78 | 0.38 |
Inventory Turnover | 2.50 | 2.59 | 2.33 |
Average Collection Period | 37.50 days | 36.5 days | 57.03 |
Debt Ratio | 65% | 67% | |
Times Interest Earned Ratio | 3.80 | 4.0 | 4.43 |
Gross Profit Margin | 38% | 40% | 33.8% |
Net Profit Margin | 3.50% | 3.60% | 4.09% |
Return on Total Assets | 4.00% | 4.00% | 4.36% |
Return on Common Equity | 9.50% | 8.00% | |
Market/Book Ratio | 1.10% | 1.20% |
Zach Industries Balance Sheet December 31, 2019 | |
Assets | |
Cash | 500 |
Marketable Securities | 1,000 |
Accounts Receivable | 25,000 |
Inventories | 45,500 |
Total Current Assets | 72,000 |
Land | 26,000 |
Buildings & Equipment | 90,000 |
Less: Accumulated Depreciation | 38,000 |
Net Fixed Assets | 78,000 |
Total Assets | 150,000 |
Liabilities & Stockholder Equity | |
Accounts Payable | 22,000 |
Notes Payable | 47,000 |
Total Current Liabilities | 69,000 |
Long-term Debt | 22,950 |
Common Stock | 31,500 |
Retained Earnings | 26,550 |
Total Liabilities and Stockholder Equity | 150,000 |
Zach Industries Income Statement for the Year Ended December 31, 2019 | |
Sales Revenue | 160,000 |
Less: Cost of Goods Sold | 106,000 |
Gross Profits | 54,000 |
Less: Operating Expenses | |
Selling Expense | 16,000 |
General and administrative Expenses | 10,000 |
Lease Expense | 1,000 |
Depreciation Expense | 10,000 |
Total Operating Expense | 37,000 |
Operating Profits | 17,000 |
Less: Interest Expense | 6,100 |
Net Profits Before Taxes | 10,900 |
Less: Taxes | 4,360 |
Net Profits After Taxes | 6,540 |
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