Evaluate current ratio and quick ratio

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Reference no: EM13798488

Compute each of the following ratios for 2013 and 2014 and indicate whether each ratio was getting "better" or "worse" from 2013 to 2014 and was "good" or "bad" compared to the Industry Avg in 2014 (round all numbers to 2 digits past the decimal place)


2013

2014

Getting Better or Getting Worse?

2014 Industry Avg

"Good" or "Bad" compared to Industry Avg

Profit Margin




0.11


Current Ratio




1.90


Quick Ratio




1.12


Return on Assets




.26


Debt to Assets




.55


Receivables turnover




18.00


Avg. collection period*




21.20


Inventory Turnover**




8.25


Return on Equity




0.25


Times Interest Earned




8.15








*Assume a 360 day year






**Inventory Turnover can be computed 2 different ways.  Use the formula listed in the text

  (the one the text indicates many credit reporting agencies generally use)



Evaluate Current Ratio, Quick Ratio, Average Collection Period, Accounts Receivable Turnover, Debt Ratio, Return on Assets, Times interest earned ratio, Return on Common Equity, Fixed Asset Turnover Ratio and Total Asset Turnover.

Reference no: EM13798488

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