Ratios Formula 2019 2018

1 Current Ratio Current Asset/Current Liabilitties =8 249 000/20 204 000

=.4083 =6 340 000/18 578 000

=.34123

2 Acid Test Ratio (Current Asset-Inventories-Prepayments)/Current Liabilitties =(8 249 000-1 251 000 - 1 262 000)/20 204 000

=.2839 =(6 340 000- 1 055 000-1 203 000)/18 578 000

=.2197

3 Debt to Equity Total Liabilities/Shareholders Equity =49 174 000/15 358 000

=3.2 =46 579 000/13 687 000

=3.4

4. Total Asset Turnover Sales/Total Assets =47 007 000/64 532 000

=.7284 =44 438 000/60 266 000

=.7374

5. Net Profit Margin EBIT/Sales =6 499 000/47 007 000

=.1383 =5 462 000/44 438 000

=.1229

6. Return On Equity Net Income/ Shareholders Equity =4 767 000/15 358 000

=.31 =3 935 000/13 687 000

=.2875

7. Return on Assets Net Income/Total Assets =4 767 000/64 532 000

=.074 =3 935 000/60 266 000

=.0653

: Based on the calculations in Step 1, select any two different types of ratios (Liquidity, Solvency, Activity or Profitability) and compare the performance of your company to the applicable industry standards below. Therefore, if your financial statements are for a hotel then you should compare the performance of the property with the industry standards for hotels. Be sure to answer the follow questions in your analysis:

1. Did your hotel perform better than the industry average and by how much was the difference or variance?

2. What do the results of your calculations indicate about the company?

{Are they profitable? Are they able to pay off their short & long term debt? Are Investors' returns increasing or decreasing etc.? Are Revenues increasing or decreasing? And so on...}

Industry Average Standards -MSN.com

Ratio Hotels Restaurants Airlines Cruise Lines

Current Ratio 1.06 1.33 .75 1.01

Quick Ratio 0.73 0.96 .57 0.85

Debt to Equity 141% 78% 216% 36%

Asset Turnover .93 .96 .85 .47

Profit Margin 6.96% 16.36% 4% 11.31%

Return on Equity 27.13% 36.82% 31.66% 9.29%

Return on Assets 6.45% 15.78% 3.41% 5.33%