Use the balance sheet and income statement found in the HVAC case on Canvas (see Cases folder) to

calculate the

missing

ratios to 2 decimal places for the

1993 column

in the table on the next page.

Use

the 1994 calculation

detail along with balance sheet and income statement

to determine the formula

needed to calculate the ratios for 1993. There are 10 missing ratios.

Show your calculations

in the last

column for each of the ratios that you calculate. You may type or handwrite

your answers (two decimal

places)

in the spaces on the ratio table provided. (10 pts)

After you complete the 10 missing ratios for 1993

think/ponder/ruminate on what each ratio attempts

to measure (think on all, but only write-up the ratios listed below). How is HVAC doing on this measure

versus prior years? The industry average? What can we learn about the company from this information?

Your written analysis (2-page maximum 20 pts.) must specifically address the following:

What do the Current, Quick, Accounts Receivable Turn, and Days Sales Outstanding attempt

to measure?

What is HVACs liquidity position as measured by the

current/quick ratios

?

Does knowledge of the companys

Accounts Receivable Turnover and DSO

alter (in any way)

your original assessment of the current and quick ratios? Why or Why not? What additional

questions does your reading of the case raise?

All papers and ratios are due at the beginning of class.

Your written analysis is subject to scrutiny for grammar and spelling just like any other written

assignment.

Staple your ratio table to your written analysis.

HVAC Ratio Analysis Name _____________________________________________

See Balance Sheet & Income Stmt. in HVAC Case on Canvas.

LIQUIDITY RATIOS Current	IND AVG	1994	1993	1992	1994 Calculation Detail	1993 Calculation please show your work for each ratio.
	1.4	1.5	1	1.5	$1,019,968 / $691,573	1
Quick	1.1	1.2	2	1.3	($114,684 + $691,656) / $691,573	2
Sales/Receivables	14.9	8.4	3	7.1	$5,839,956 / $691,656	3
Days Sales Outstanding	24.5	43.2	4	51.1	365 / 8.44344	4
Inventory Turnover	34.9	31.3	5	30.9	$3,871,000 / $123,664	5
Average Age of Inventory	10.5	11.7	6	11.8	365 / 31.30256	6
Direct Costs/Payables	26.2	16.8	16.4	13.2	$3,871,000 / $230,431	XXXXXXXXXXXXXXXXXXXXX
Sales/Working Capital	28.3	17.8	18.8	16.1	$5,839,956 / ($1,019968 - $691,573)	XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
COVERAGE RATIOS Times Interest Earned	IAvg	1994	1993	1992	1994 Calculation	1993 Calculation
	2.1	2.1	1.4	4.7	$50,925 /$24,451	XXXXXXXXXXXXXXXXXXXXX
Current Maturities Coverage	1.8	1.4	0.4	0.9	($66,407 + $34,800 + $3,171) / ($76,450 + $0)	XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
LEVERAGE RATIOS Fixed/Worth	IAvg	1994	1993	1992	1994 Calculation	1993 Calculation
	1.0	0.3	7	0.5	$153,047 / ($492,473 - $31,126)	7
Debt/Worth	2.0	1.5	1.9	2.3	$713,257 / ($492,473 - $31,126)	XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
OPER. PROFITABILITY %EBT/Tangible Net Worth	IAvg	1994	1993	1992	1994 Calculation	1993 Calculation
	8.0%	5.7%	2.4%	12.5%	$26,474 / ($492,473 -$31,126)	XXXXXXXXXXXXXXXXXXXXX
%EBT/Total Assets	3.4%	2.2%	8	3.5%	$26,474 / $1,205,730	8
Sales/Net Fixed Assets	14.8	38.2	28.6	27.8	$5,839,956 / $153,047	XXXXXXXXXXXXXXXXXXXXX
Sales/Total Assets	3.8	4.8	9	4.1	$5,839,956 / $1,205,730	9
%Officers Comp/Sales	3.0%	6.1%	7.3%	7.4%	$354,060 / $5,839,956	XXXXXXXXXXXXXXXXXXXXX
Gross Profit Margin	24.7%	33.7%	10	28.9%	($5,839,956 - $3,871,000)/ $5,839,956	10
Operating Expenses	23.2%	32.8%	32.1%	27.8%	($5,789,031 - $3,871,000)/ $5,839,956	XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX