05-13-2010, 02:25 AM
Part 1 (Liquidity Ratios 
1. Acid Test Ratio/Quick ratio
Acid Test Ratio/Quick ratio = Quick Assets/Current Liabilities
Acid Test Ratio/Quick ratio = (Current Assets-Inventory-Prepaid expenses)/Current Liabilities
= (36279168000-1155042000-512383000-267422000)/33455815000
=1.0265
2. Sales to working Capital
Sales to working Capital = Net Sales/Working Capital
Sales to working Capital = Net Sales/ (Current Assets-Current Liabilities)
= 76642399000/ (36279168000-33455815000)
= 76642399000/ (2823353000)
=27.14
3. How working capital does help the financial analyst?
Part 2 (Solvency Ratio
1. Debt-to-Equity Ratio
Debt-to-Equity Ratio = Total Debt /Total Equity
= (Current Liabilities + Long Term Liabilities)/ Total Equity
= (33455815+27931963)/10315060
= 5.466
Description: Debt is 5.466 of the equity of the firm which is strong value as the firm is 5.466 times meet the liabilities or Debts , the financial investors like this ratio high so company can get different loans or borrowing due to this positive ratio.
2. Time Interest Earned Ratio
Time Interest Earned Ratio =operating Income before Interest /Annual Interest Cost
= (2979911000)/2370674000
= 1.2567
Description: Debt is 5.466 of the equity of the firm which is strong value as the firm is 5.466 times meet the liabilities or Debts , the financial investors like this ratio high so company can get different loans or borrowing due to this positive ratio.
3. Fixed Charge Coverage Ratio
Fixed Charge Coverage Ratio =operating Income before Interest /Annual Interest Cost
= (2979911000)/2370674000
= 1.2567
4. Define difference between both ratios (Time Interest Earned & Fixed Charge Coverage)? To be very precise mention why do we calculate both?
Part 3 (Profitability ratios
1. Gross Profit Margin
= Gross profit/Net sales * 100
=7404163000/76642399000*100
= 9.660661849 %
2. Operating Profit Margin Return on sales
= Operating profit before IT / Net sales *100
= 2979911000/76642399000*100
= 3.888071145 %
3. Pretax Margin
= Operating profit before Tax / Net sales *100
= 2381627000/76642399000*100
= 3.107 %
4. Net Profit Margin
= Net profit / Net sales *100
= 991067000/76642399000*100
= 1.2 %
5. Return on Equity (ROE)
= Net profit / Total Equity *100
= 991067000/10315060*100
= 9.607 %
6. Return on Assets (ROA
= Net profit / Total Assets *100
= 991067000/71702838000*100
= 1.382 %
7. DuPont Return on Assets
=Operating profit margin ratio *Assets turnover ratio
= 3.889% * (Net sales / fixed assets)
= 3.89% * 2.17%
=8.43913%
8. What is the need for calculating DuPont Return on Assets when we already have Return on Assets ratio calculated?
Part 4(Activity Ratios
1. Inventory Turnover
2. Accounts Receivable Turnover
3. Accounts payable turnover
4. Average collection period
5. Average payment period
1. Acid Test Ratio/Quick ratio
Acid Test Ratio/Quick ratio = Quick Assets/Current Liabilities
Acid Test Ratio/Quick ratio = (Current Assets-Inventory-Prepaid expenses)/Current Liabilities
= (36279168000-1155042000-512383000-267422000)/33455815000
=1.0265
2. Sales to working Capital
Sales to working Capital = Net Sales/Working Capital
Sales to working Capital = Net Sales/ (Current Assets-Current Liabilities)
= 76642399000/ (36279168000-33455815000)
= 76642399000/ (2823353000)
=27.14
3. How working capital does help the financial analyst?
Part 2 (Solvency Ratio
1. Debt-to-Equity Ratio
Debt-to-Equity Ratio = Total Debt /Total Equity
= (Current Liabilities + Long Term Liabilities)/ Total Equity
= (33455815+27931963)/10315060
= 5.466
Description: Debt is 5.466 of the equity of the firm which is strong value as the firm is 5.466 times meet the liabilities or Debts , the financial investors like this ratio high so company can get different loans or borrowing due to this positive ratio.
2. Time Interest Earned Ratio
Time Interest Earned Ratio =operating Income before Interest /Annual Interest Cost
= (2979911000)/2370674000
= 1.2567
Description: Debt is 5.466 of the equity of the firm which is strong value as the firm is 5.466 times meet the liabilities or Debts , the financial investors like this ratio high so company can get different loans or borrowing due to this positive ratio.
3. Fixed Charge Coverage Ratio
Fixed Charge Coverage Ratio =operating Income before Interest /Annual Interest Cost
= (2979911000)/2370674000
= 1.2567
4. Define difference between both ratios (Time Interest Earned & Fixed Charge Coverage)? To be very precise mention why do we calculate both?
Part 3 (Profitability ratios
1. Gross Profit Margin
= Gross profit/Net sales * 100
=7404163000/76642399000*100
= 9.660661849 %
2. Operating Profit Margin Return on sales
= Operating profit before IT / Net sales *100
= 2979911000/76642399000*100
= 3.888071145 %
3. Pretax Margin
= Operating profit before Tax / Net sales *100
= 2381627000/76642399000*100
= 3.107 %
4. Net Profit Margin
= Net profit / Net sales *100
= 991067000/76642399000*100
= 1.2 %
5. Return on Equity (ROE)
= Net profit / Total Equity *100
= 991067000/10315060*100
= 9.607 %
6. Return on Assets (ROA
= Net profit / Total Assets *100
= 991067000/71702838000*100
= 1.382 %
7. DuPont Return on Assets
=Operating profit margin ratio *Assets turnover ratio
= 3.889% * (Net sales / fixed assets)
= 3.89% * 2.17%
=8.43913%
8. What is the need for calculating DuPont Return on Assets when we already have Return on Assets ratio calculated?
Part 4(Activity Ratios
1. Inventory Turnover
2. Accounts Receivable Turnover
3. Accounts payable turnover
4. Average collection period
5. Average payment period