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What do these ratios suggest about the companys performance during the two periods presented? Which ratios would a senior operational manager for WGC be most
What do these ratios suggest about the companys performance during the two periods presented?
Which ratios would a senior operational manager for WGC be most interested in following? Why?
Wicked Good Cupcakes | ||
31-Dec-15 | 31-Dec-16 | |
Profitability Ratios (in %) | ||
Return on equity | 19.71% | 16.60% |
Return on assets | 13.54% | 9.30% |
Return on invested capital | 18% | 12% |
Profit margin | 7.89% | 6.03% |
Gross margin | 47% | 44% |
Turnover-Control Ratios | ||
Asset turnover | 1.72 | 1.54 |
Fixed-asset turnover | 6.5 | 6.4 |
Inventory turnover | 4.2 | 4.1 |
Collection period (days) | 3.3 | 4.03 |
Days' sales in cash | 1,618.14 | 1,839.02 |
Payables period | 40.39 | 47.3 |
Leverage and Liquidity Ratios | ||
Assets to equity | 1.46 | 1.79 |
Debt to assets | 0.07 | 0.18 |
Debt to equity | 0.1 | 0.33 |
Times interest earned | 24.24 | 28.11 |
Current ratio | 3.01 | 3.07 |
Acid test | 1.03 | 1.31 |
Table 1 |
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