TUTORIAL FINANCIAL RATIO ANALYSIS

1. X Co. has made plans for next year. It is estimated that the company will employ total
assets Rs 8,00,000; 50 percent of the assets being financed by borrowed capital at an
interest cost of 8% per year. The direct costs for the year are estimated at Rs 4,80,000
and all other operating expenses are estimated at Rs 80,000. The goods will be sold to
customers at 150% of the direct costs. Tax rate is 50%. You are required to calculate
a. Net profit margin
b. Return on assets
c. Assets turnover
d. Return on owners equity
2. The Shannon Corporation has credit sales of Rs 11,87,200. Given the following ratios,
fill in the balance sheet.
Total Asset turnover
Cash to Total Assets
Account receivable turnover
Inventory Turnover
Current ratio
Debt to total assets
3.

3.20 times
1.80 %
20 times
16 times
1.95 times
40 %

SHANNON CORPORATION
BALANCE SHEET 2012
ASSETS
LIABILITY AND EQUITY
Current Debt
Long-Term Debt

Cash
Accounts
Receivable
Inventory
Total Current
Asset
Fixed Assets

Total Assets

Total Debt
Equity
Total Debt and
Equity