Analyze the following ratios. What does the NET PROFIT MARGIN RATIO tell about this company? Are...

Analyze the following ratios.

What does the NET PROFIT MARGIN RATIO tell about this company? Are the trends getting better or worse? Why or why not? Would you recommend purchase of this stock? Why or why not? Please explain your answers.

Net Profit	2016	2017	2018
Margin Ratio	10.91	8.97	8.71

What does the RETURN ON TOTAL ASSETS RATIO tell about this company? Are the trends getting better or worse? Why or why not? Would you recommend purchase of this stock? Why or why not? Please explain your answers.

Return Total	2016	2017	2018
Assets Ratio	6.75%	5.10%	5.06%

Expert Solution

Net profit ratio shows the profitability of company that is percentage of net pofit earned by company over its sales.

From the net profit ratio given for 3 years it can be seen that the margin ratio of company is decreasing from 10.91% in 2016 to 8.71% in 2018.

The decrease in margin ratio could be due to decrease in sales or increase in expenses of company which led to lower net profit earned by company.

The profitability of company is declining and so at this moment purchase of shares of company is not recommended.

Return on total assets ratio shows the percentage of net income earned by company on assets invested.

From the 3 years return on asset ratio given it can be seen that the return on asset ratio of company is declining from 6.75% in 2016 to 5.06% in 2018.

The decrease could be due to lower net income generated or increase in asset investment during 2017 and 2018.

The return on asset ratio of company is declining and so at this moment the purchase of shares of company is not recommended.

jeff jeffy answered 3 weeks ago

net profit margin ratio, return on asset ratio, inventory turnover ratio which ratios you found most...

net profit margin ratio, return on asset ratio, inventory turnover ratio which ratios you found most helpful in explain your company’s financial performance and why

-What does a high Debt to Capital ratio tell you about a company? -What does a...

-What does a high Debt to Capital ratio tell you about a company? -What does a high Debt to EBITDA ratio tell you about a company? these are for my own personal understanding about some Leverage ratios go as in depth as you can. also what is important to consider when comparing these ratios with those of other companies in the same industry?

-Ratio Analysis Describe profit margin and gross profit ratios. (In detail) Explain the importance of each...

-Ratio Analysis Describe profit margin and gross profit ratios. (In detail) Explain the importance of each ratio and how each ratio assists the investor in evaluating a company's performance.

Using the financial data below calculate the following ratios: 1) Gross Profit Margin; 2) Net Profit...

Using the financial data below calculate the following ratios: 1) Gross Profit Margin; 2) Net Profit Margin; 3) Return on Assets; 4) Days Sales Outstanding; 5) Quick Ratio. For EACH of these five ratios do the following: 1) calculate the value and 2) interpret the value in about one sentence. TO RECEIVE ANY CREDIT YOU MUST SHOW YOUR WORK, WITHIN THE PROVIDED WORK SPACE. FINAL ANSWERS ONLY WILL NOT CUT IT! Balance Sheet ASSETS LIABILITIES Cash: $1,160,000 Current Liabilities: $173,000 A/R: 335,000 Non-current...

How to analyse a company by this ratio? Or what can these ratios tell us? Quick...

How to analyse a company by this ratio? Or what can these ratios tell us? Quick Ratio 2017 2016 2015 Quick Ratio 1.77 1.95 2.28

What does net profit margin indicate? A. The marginal growth or decline of net income year...

What does net profit margin indicate? A. The marginal growth or decline of net income year over year. B. How much of a return is generated from an investment. C. How much net profit is generated per each dollar of revenue. D. How much net profit is generated for every dollar of assets.

What does a net profit margin of 15% and an industry average of-1.2% mean?

What does a net profit margin of 15% and an industry average of -1.2% mean?

Profit margin = 9.2 % Capital intensity ratio = .53 Debt−equity ratio = .68 Net income...

Profit margin = 9.2 % Capital intensity ratio = .53 Debt−equity ratio = .68 Net income = $ 103,000 Dividends = $ 52,000 Based on the above information, calculate the sustainable growth rate for Southern Lights Co. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Sustainable growth rate %

What do profits and losses tell a firm? How does profit margin serve a social function?...

What do profits and losses tell a firm? How does profit margin serve a social function? How does Milton Friedman’s essay The Social Responsibility of Business is to Maximize its Profits address this problem? Is Friedman right? What are some limitations to his approach?

What is the firm's current year net profit margin?

Category Prior Year Current YearAccounts payable ??? ???Accounts receivable 320,715 397,400Accruals 40,500 33,750Additional paid in capital 500,000 541,650Cash 17,500 47,500Common Stock 94,000 105,000COGS 328,500 428,048.00Current portion long-term debt 33,750 35,000Depreciation expense 54,000 54,731.00Interest expense 40,500 41,017.00Inventories 279,000 288,000Long-term debt 339,670.00 401,877.00Net fixed assets 946,535 999,000Notes payable 148,500 162,000Operating expenses (excl. depr.) 126,000 161,905.00Retained earnings 306,000 342,000Sales 639,000 850,323.00Taxes 24,750 48,686.00What is the firm's current year net profit margin?

Question