A firm has been experiencing low profitability in recent years. Perform an analysis of the firm's financial positio most recent industry average ratios and the firm's financial statements are as follows: Industry Average Ratios Current ratio Debt-to-capital ratio Times interest earned EBITDA coverage Inventory turnover Cash and equivalents Accounts receivables Inventories Days sales outstanding *Calculation is based on a 365-day year. Balance Sheet as of December $ 78 51 125 $254 Total current assets Gross fixed assets Less depreciation Fixed assets turnover Total assets turnover Profit margin Return on total assets Return on common equity 15 days Return on invested capital Net fixed assets Total assets 2x 17% 3x 6x 11x 191 55 $ 136 $390 31, 2021 (millions of dollars) Accounts payable Other current liabilities Notes payable Total current liabilities Long-term debt Total liabilities Common stock Retained earnings Total stockholders' equity Total liabilities and equity 6x 4x 2.50% 10.00% 14.70% 14.40% $31 20 43 $94 16 $110 90 190 $280 $390
A firm has been experiencing low profitability in recent years. Perform an analysis of the firm's financial positio most recent industry average ratios and the firm's financial statements are as follows: Industry Average Ratios Current ratio Debt-to-capital ratio Times interest earned EBITDA coverage Inventory turnover Cash and equivalents Accounts receivables Inventories Days sales outstanding *Calculation is based on a 365-day year. Balance Sheet as of December $ 78 51 125 $254 Total current assets Gross fixed assets Less depreciation Fixed assets turnover Total assets turnover Profit margin Return on total assets Return on common equity 15 days Return on invested capital Net fixed assets Total assets 2x 17% 3x 6x 11x 191 55 $ 136 $390 31, 2021 (millions of dollars) Accounts payable Other current liabilities Notes payable Total current liabilities Long-term debt Total liabilities Common stock Retained earnings Total stockholders' equity Total liabilities and equity 6x 4x 2.50% 10.00% 14.70% 14.40% $31 20 43 $94 16 $110 90 190 $280 $390
Chapter5: Evaluating Operating And Financial Performance
Section: Chapter Questions
Problem 9EP
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