Question
In: Finance
Identify 2 financial ratios that are useful in analyzing a balance sheet, income statement, or cash...
Identify 2 financial ratios that are useful in analyzing a balance sheet, income statement, or cash flow statement, and provide an example of how these ratios can be used by a firm's managers or other market analysts.
Solutions
Expert Solution
Ratio analysis is a tool or method which was developed to perform quantitative analysis on numbers found on financial statements. Ratio analysis help to understand the balance sheet in summary way.
Inventory turnover Ratio
Inventory turnover is calculated by cost of goods sold Divide by average inventory. A higher turnover than the industry average means that inventory is sold at a faster rate, showing the inventory management effectiveness. Additionally, a high inventory turnover rate means less company resources are tied up in inventory.
So inventory turnover ratio is help to management to analysis of how fast the inventory is moving in the system.
Account Receivables turnover Ratio
Account receivables turnover ratio is calculated by Net Income divide by average Account receivables. Account Receivable ratio is a analysis of management that how quickly and efficiently a company collects on its outstanding from the customers. Account receivables turnover indicates how many times per period the company collects and turns into cash its customers’ accounts receivable.
jeff jeffy answered 1 year agoRelated Solutions
Analyzing, Forecast, and Interpret Income Statement and Balance Sheet Following are the income statement and balance...
Analyzing, Forecast, and Interpret Income Statement and
Balance Sheet
Following are the income statement and balance sheet of Whole Foods
Market Inc.
WHOLE FOODS MARKET INC.
Consolidated Statement of Operations
Fiscal Years Ended (in millions)
Sept 25, 2016
Sept 27, 2015
Sales
$15,724
$15,389
Cost of goods sold and occupancy costs
10,313
9,973
Gross profit
5,411
5,416
Selling, general and administrative expenses
4,477
4,472
Pre-opening expenses
64
67
Relocation, store closures and lease termination costs
13
16
Operating income
857...
Analyzing, Forecast, and Interpret Income Statement and Balance Sheet Following are the income statement and balance...
Analyzing, Forecast, and Interpret Income Statement and
Balance Sheet
Following are the income statement and balance sheet of Whole Foods
Market Inc.
WHOLE FOODS MARKET INC.
Consolidated Statement of Operations
Fiscal Years Ended (in millions)
Sept 25, 2016
Sept 27, 2015
Sales
$15,724
$15,389
Cost of goods sold and occupancy costs
10,313
9,973
Gross profit
5,411
5,416
Selling, general and administrative expenses
4,477
4,472
Pre-opening expenses
64
67
Relocation, store closures and lease termination costs
13
16
Operating income
857...
The three financial statements: the Income Statement, the Balance Sheet, and the Statement of Cash Flows....
The three financial statements: the Income Statement, the
Balance Sheet, and the Statement of Cash Flows. Please explain the
advantages and disadvantages of using these statements to make
financial decisions for the firm. Note what valuable information
can be obtained from each statement. Think about how that
information can be used to guide decisions and how that information
might be misleading.
For each Financial Transaction below, identify the effect on the Balance Sheet, Income Statement and Statement...
For each Financial Transaction below, identify the effect on the
Balance Sheet, Income Statement and Statement of Cash Flows. If a
transaction does not effect a statement(s), then answer “N/A.” (1/2
point for each of the three statements.) Identify if the
transaction on the statement of cash flows is an Operating activity
(OA), Investing activity (IA) or a Financing Activity (FA) 1.
Calculate the Depreciation on a delivery truck that costs $225,000
with a salvage value of $10,000. Assume the...
Forecasting the Income Statement, Balance Sheet, and Statement of Cash Flows Following are the financial statements...
Forecasting the Income Statement, Balance Sheet, and Statement
of Cash Flows
Following are the financial statements of Nike, Inc.
Consolidated Statements
of Income
Year ended May 31
In Millions
2011
2010
Revenues
$ 20,862
$ 19,014
Cost of sales
11,354
10,214
Gross profit
9,508
8,800
Demand creation expense
2,448
2,356
Operating overhead expense
4,245
3,970
Total selling and administrative expense
6,693
6,326
Interest expense (income), net
4
6
Other (income)
(33)
(49)
Income before income taxes
2,844
2,517
Income taxes...
Forecasting the Income Statement, Balance Sheet, and Statement of Cash Flows Following are the financial statements...
Forecasting the Income Statement, Balance Sheet, and
Statement of Cash Flows
Following are the
financial statements of Nike, Inc.
Consolidated Statements of Income
Year ended May 31
In Millions
2011
2010
Revenues
$ 20,862
$ 19,014
Cost of sales
11,354
10,214
Gross profit
9,508
8,800
Demand creation expense
2,448
2,356
Operating overhead expense
4,245
3,970
Total selling and administrative expense
6,693
6,326
Interest expense (income), net
4
6
Other (income)
(33)
(49)
Income before income taxes
2,844
2,517
Income taxes...
Below are numbers from a balance sheet and income statement. Construct the financial ratios requested below....
Below are numbers from a balance sheet and income statement.
Construct the financial ratios
requested below.
Sales 443555
Operating Costs 326133
Depreciation 10000
Interest Expense 5000
Tax Expense 29408
Cash 1000
Receivables 30000
Inventories 54355
Fixed Assets, Net 50000
Payables 11000
Accrued Expenses 10000
Long-Term Loan 50000
Common Equity 64355
Prepare an income statement and a balance sheet for is company
using the information provided.
Calculate:
1. Current ratio
2. Quick ratio
3. NWC-to-total-Assets (Working capital to assets)
4. Ratio...
Calculating financial ratios) The balance sheet and income statement for the J. P. Robard Mfg. Company...
Calculating financial ratios) The balance sheet and income
statement for the J. P. Robard Mfg. Company are as follows:
J. P. Robard Mfg., Inc.
Balance Sheet ($000)
Cash
$490
Accounts receivable
2,090
Inventories
1,090
Current assets
$3,670
Net fixed assets
4,600
Total assets
$8,270
Accounts payable
$1,020
Accrued expenses
630
Short-term notes payable
250
Current liabilities
$1,900
Long-term debt
1,970
Owners' equity
4,400
Total liabilities and owners' equity
$8,270
J. P. Robard Mfg., Inc.
Income Statement ($000)
Net sales (all...
Below are numbers from a balance sheet and income statement. Construct the financial ratios requested below....
Below are numbers from a balance sheet and income statement.
Construct the financial ratios
requested below.
Sales 499891
Operating Costs 359935
Depreciation 10000
Interest Expense 5000
Tax Expense 29408
Cash 1000
Receivables 30000
Inventories 59989
Fixed Assets, Net 50000
Payables 11000
Accrued Expenses 10000
Long-Term Loan 50000
Common Equity 69989
6. Interest coverage
7. Net profit margin
8. Sales to total assets (Asset turnover)
9. Return on assets
10. Equity multiplier
11. Return on equity
Cash Budget, Income Statement and Balance Sheet
The following information is available in the question attached:
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