Using the 2011 income statement and balance sheet of Trimark Products Inc., as constructed in problems 1

Question:

Using the 2011 income statement and of Trimark Products Inc., as constructed in problems 1 and 2 above, compute its financial ratios. How is the firm doing relative to its industry in the areas of liquidity, asset management, leverage, and profitability?
Ratio .......... Industry Average
Current Ratio ............ 2.200
Quick Ratio (or Acid Test Ratio) ..... 1.500
Cash Ratio ............. 0.135
Debt Ratio ............. 0.430
Cash Coverage ........... 10.600
Day’s Sales in Receivables ....... 29.000
Total ......... 2.800
Inventory Turnover .......... 20.100
Day’s Sales in Inventory ....... 11.500
Receivables Turnover ......... 32.000
Profit Margin ............ 0.045
Return on Assets .......... 0.126
Return on Equity .......... 0.221

Asset Turnover
Asset turnover is sales divided by total assets. Important for comparison over time and to other companies of the same industry. This is a standard business ratio. Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...