Question
Using Financial Ratios and the company and industry information answer the following questions. Company 2018 2019 Sales 38,578,155 42,000,000 Inventory 3,210,000 4,118,000 Total Assets 17,254,819
Using Financial Ratios and the company and industry information answer the following questions.
Company |
| |
| 2018 | 2019 |
Sales | 38,578,155 | 42,000,000 |
Inventory | 3,210,000 | 4,118,000 |
Total Assets | 17,254,819 | 23,917,000 |
Debt | 7,026,000 | 10,388,000 |
Equity | 10,228,819 | 16,529,000 |
Net Income | 6,268,975 | 8,410,908 |
EBIT | 9,873,447 | 13,119,000 |
Current Assets | 10,535,819 | 15,066,000 |
Current Liabilities
| 3,980,000 | 4,342,000 |
Industry Average |
| |
| 2018 | 2019 |
Current Ratios | 2.89 | 3.26 |
Total Asset Turnover | 2.14 | 2.33 |
Debt-Equity | 31.3% | 30.2% |
Return on Total Assets` | 32.34% | 41.87% |
Return on Equity | 43.6% | 48.3% |
Sales Growth | 3% | 6% |
Part 1 For the company calculate ROE and Asset Turnover for 2019
A) 50.9% and 1.76
B) 79.4% and 2.23
C) 63.4% and 1.76
D) 50.9% and .56
Part 2 Interpret which of these ratios show improvement
A) Return on Equity, Total Asset Turnover
B) Total Asset Turnover, Current Ratio
C) Current Ratio, Debt to equity
D) Return on Total Assets, Debt to equity
Part 3 Evaluate what the company is doing well in Comparison to the Industry
- Sales Growth, Asset utilization, Debt burden
- Short-term liquidity, debt burden, return on assets
- Return on equity, Asset utilization, debt burden
- Sales Growth, Return on equity, short-term liquidity
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