FINANCIAL RATIOS: LIQUIDITY 4.

Operating Cash Flow Ratio

1. Current Ratio Step 1: Find the Operating Cash Flow Ratio

Step 1: Find the Current Ratio of Hey, Sweetie!.
of Hey, Sweetie!. Step 2: Given
Step 2: Given • Operating Cash flow: ₱ 1,939.00
• Current Assets: ₱ 2,479.00 • Current Liabilities: ₱ 300.00
• Current Liabilities: ₱ 300.00 Step 3:
Step 3:
Step 4:
Step 4: Solve:Operating Cash Flow Ratio
Solve:Current Ratio= ₱ 2,479.00 / ₱ 300.00 = ₱ 1,939.00 / ₱ 300.00
Step 5: Step 5:Operating Cash Flow Ratio=6.46
• Current Ratio= 8.26
Sufficient, good financial standing Hey, Sweetie! covers ₱6.46 of the
liquid assets available to cover each
2. Quick Ratio ₱1 of its current liabilities.

Step 1: Find the Quick Ratio

of Hey, Sweetie!.

Step 2:Given

• Current Assets: ₱ 2,479.00

• Current Liabilities: ₱ 300.00
Step 3:

Step 4:
Solve: Quick Ratio= ₱ 2,479.00 / ₱ 300.00
Step 5:

• Quick Ratio= 8.26

Sufficient, good financial standing
3. Cash Ratio
Step 1: Find the Cash Ratio
of Hey, Sweetie!.

Step 2: Given
• Cash: ₱ 2,479.00
• Current Liabilities: ₱ 300.00
Step 3:

Step 4:
Solve: Cash Ratio = ₱ 2,479.00 / ₱ 300.00
Step 5:

• Cash Ratio = 8.26

Sufficient, good financial standing
FINANCIAL RATIOS: PROFITABILITY FINANCIAL RATIOS: PROFITABILITY
A. Margin Ratios B. Return Ratios

1. Gross Profit Margin

1. Return on Assets

Given:
Given:
• Gross profit: ₱ 1,939.00
• Net sales: ₱ 9,410.00 • Net Income: ₱ 1,639.00
• Total Assets : ₱ 2,779.00
Gross Profit Margin
Return on Assets
= ₱ 1,939.00 / ₱ 9,410.00 x 100% =₱ 1,639.00 / ₱ 2,779.00 x100%
=0.2060 x 100% = 0.5898 x 100%
= 20.60% =58.98%
2. EBITDA Margin

2. Return on Equity
Given:

• EBITDA: ₱ 1,639.00 Given:

• Net sales: ₱ 9,410.00 • Net Income: ₱ 1,639.00
• Shareholders’ Equity : ₱ 2,479.00
EBITDA Margin
Return on Equity
=₱ 1,639.00 / ₱ 9,410.00 X 100% =₱ 1,639.00 / ₱ 2,479.00 X 100%
=0.1742 X 100% =0.6612 x 100%
=17.42% =66.12%
3. Operating Profit Margin
3. Return on Invested Capital

Given:
Given:
• Operating Profit: ₱ 1,639.00
• Net sales: ₱ 9,410.00 • Net Operating Profit After Tax:
₱0.00
Operating Profit Margin • Invested Capital : ₱ 0.00
=₱ 1,639.00 / ₱ 9,410.00 X 100%
=0.1742 x 100% Return on Invested Capital
= 17.42 % =0.00/0.00 x 100%
=0.00 x 100%
4. Net Profit Margin =0.00

Follow-up Question:
Given:
Based on the result of our ratios, our
• Net Income: ₱ 1,639.00 business is performing well. Sufficient,
• Net sales: ₱ 9,410.00 good financial standing and can cover
liabilities.
Net Profit Margin
=₱ 1,639.00 / ₱ 9,410.00 X 100%
=0.1742 x 100%
= 17.42 %