LESSON ON FINANCIAL ANALYSIS

1. Current ratio 2.1

Quick ratio 1.9
Current liabilities 1,950,000.0

Compute for the amount of inventories.

Assume current assets is only composed of cash,
short term investments, receivables, and inventories.

2. Quick ratio 1.7

Cash ratio 1.4
Current liabilities 2,350,000.0
Receivables amount is 40% more than short term investments.

Compute for the amount of short term investments.

Assume current assets is only composed of cash,
short term investments, receivables, and inventories.

3. ARTO 19.5
Receivables, beginning 11,250,000.0
Receivables, ending 12,478,000.0

Compute for net annual sales.

4. ARTO 15.4
Receivables, beginning 10,983,000.0
Receivables, ending 11,473,000.0
Sales returns and allowances 450,000.0
Sales discounts 630,000.0

Compute for the gross sales.

5. Gross sales 12,250,000.0

Sales returns and allowances 250,000.0
Sales discounts 179,520.0
Average receivables 5,350,000.0

Compute for the days sales outstanding

6. Inventory Turnover 6.5

Inventory, beginning 985,000.0
Inventory, end 1,011,000.0

Compute for the COGS

7. Inventory Turnover 7.1
Inventory, beginning 1,014,000.0
Inventory, end 1,124,000.0

Compute for the purchases

8. Gross sales 14,785,000.0

Sales returns and allowances 356,000.0
Sales discounts 189,741.0
Average receivables 6,987,452.0
Inventory, beginning 1,147,000.0
Inventory, end 1,165,452.0
Purchases 9,654,125.0
Freight in 785,410.0
Payables, beginning 1,598,741.0
Payables, end 1,011,236.0

Compute for the cash conversion cycle

9. Total asset turnover 2.2

Fixed asset turnover 3.1
Gross sales 11,254,000.0
Sales returns and allowances 2,258,000.0
Sales discounts 1,269,000.0

Compute for the amount of net current assets

10. Total asset turnover 1.8

Total equity turnover 2.3

Compute for the debt ratio

11. Total asset turnover 1.5

Total equity turnover 2.6
Fixed asset turnover 2.1
Net sales 11,250,000.0
Current ratio 1.1

Compute for the current liabilities

12. Return on Equity 15%
Total assets 9,500,000.0
Total asset turnover 1.4
Net income ratio 9%

Compute for the equity

13. Gross profit margin 29%

EBITDA margin 18%
EBIT margin 14%
Cost of goods sold 6,782,000.00

Compute for depreciation & amortization expense

14. Total assets 9,500,000.0

Debt ratio 40%
Capital infusion for new investment project 7,500,000.0

Compute for the optimal funding mix to maintain current debt level

15. Total equity turnover 2.4

EBITDA margin 16%
Cost of goods sold 17,842,000.0
Total equity 15,123,000.0

Compute for the Operating expenses (except ITDA)