CHAPTER 6

I. Analysis of liquidity or short-term solvency

Current ratio

20x4 2.402525

20x3 2.75372

Quick or acid test ratio

Cash
20x4 2,030.50

20x3 1,191

Cash-flow Liquidity Ratio

Cash
20x4 2,030.50

20x3 1,191
II. Analysis of asset liquidity and asset manageme
Accounts Receivable Turnover
Net Sales
20x4 107,800

20x3 76,500

Average Collection Period

Days
20x4 365

20x3 365

Invenotry Turnover

20x4

20x3

Average Sale Period

Days
20x4 365

20x3 365

Fixed Assets Turnover

20x4

20x3

Total Asset Turnover

20x4

20x3

III. Analysis of Leverage: Debt Financing and Cove

Debt Ratio

20x4

20x3
Debt to Equity Ratio

20x4

20x3

Time Interest Earned

20x4

20x3

Fixed Charge Coverage

20x4

20x3
 y or short-term solvency

acid test ratio

Marketable securities Accounts Receivables Quick assets Answer
2,636 4,704 9,370.50 0.682459

4,002 4,335 9,528.00 0.932655

w Liquidity Ratio
Marketable securities CF from Operating Answer
2,636 5,012 9,678.50 0.706279

4,002 -1,883.50 3,309.50 0.323953

iquidity and asset management efficiency
Receivable Turnover
Ave. Accounts receivable
4,327.50 24.9104563835933

4,175 18.3233532934132

Collection Period
AR Turnover
24.9 14.6586345381526

18.32 19.9235807860262

Cost of Goods sold Ave. Inventory

64,682 20,952.50 3.08707791433003

45,939.50 18,384.50 2.49881693818162

Inventory Turnover
3.09 118.122977346278

2.5 146

ets Turnover
Net sales Average net PPE
107,800 12,014 8.97286499084402

76,500 9,488.50 8.06239131580334

et Turnover
Net sales Ave. Total Asset
107,800 42,824.30 2.51726239541569

76,500 37,954.50 2.01557127613326

age: Debt Financing and Coverage

51%

50%
 107.46%

100.46%

rest Earned

7.44642166344294

5.18489240228371

rge Coverage
20x4 20x3 Sum Average
4,480 4,175 8,655 4327.50

Ave.
23,520.50 18,384.50 41,905.00 20952.50

Ave.
14,539.50 9,488.50 24,028.00 12014.00

47,694 37,954.50 85,649 42824.25

Exercise

Requirements:

1. 2017 Current Ratio

2. 2017 Acid test ratio
3. 2016 Acid test ratio
4. 2017 Gross profit ratio
5. 2017 Net profit ratio
6. 2017 Operating ratio
7. 2017 Debt-to-equity ratio
8. 2016 Debt-to-equity ratio
Requirements:

1. 2017 Current Ratio

2. 2017 Acid test ratio
3. 2016 Acid test ratio
4. 2017 Gross profit ratio
5. 2017 Net profit ratio
6. 2017 Operating ratio
7. 2017 Debt-to-equity ratio
8. 2016 Debt-to-equity ratio