Case Essays

1930 Words Nov 27th, 2012 8 Pages
1. Read the above attached document. 2. Complete Experiential Exercise 4A, Step 1, page 128. Please note that the instructions guide you to “Table 4-7”. As this instruction is a typo in the text, please replace it with “Table 4-6”. Once you have found “Table 4-6”, please complete the first 18 ratios and then 2 of your choice form the remaining ratios (this will equal the twenty required in the Assurance of Learning Exercise).
Financial ratio analysis is one of the best techniques for identifying and evaluating internal strengths and weaknesses. Potential investors and current shareholders look closely at firms’ financial ratios, making detailed comparisons to industry averages and to previous period of time. Financial ratio analyses
…show more content…
ntage of total funds that are |
| | |provided by creditors |
|Debt to equity ratio |Total debt/ Total stockholders’ equity= |The percentage of total funds provided by |
| |10189.5/13382.6= 0.76 |creditors versus by owners |
|Times interest earned ratio |Profits before interest and taxes/ Total interest |The extent to which earnings can decline |
| |charges= 6283.7/522.6= 12.02 |without the firm becoming unable to meets its|
| | |annual interest costs |
|Inventory turnover |Sales/ Inventory of finished goods |Whether a firm holds excessive stocks of |
| |=23522.4/111.5=210.96 |inventories and whether a firm is slowly |
| | |selling its inventories compared to the |
| | |industry average |

Related Documents