Question

Refer to Muscat Thread Mills financial statements then compute the following:

1. ROCE = ...................... please write formula only 1.1. Altman’s Z-Score ............... please write formula only

2. Operating Cash Flow To Current Liabilities Ratio: write formula only

3. A\R Turnover: write formula only

4 Inventory Turnover: ..............write formula only

5. Accounts Payable Turnover:..............write formula only

6. Interest Coverage Ratio: ...........write formula only

7. Long- Term Debt Ratio.............write formula only

8 Debt/ Equity Ratio: ...........write formula only

9. Long- Term Debt to Assets Ratio: .............write formula only

10. Interest Coverage Ratio: ............write formula only

11 Operating Cash Flow to Total Liabilities ratio: ..............write formula only

12. Earnings Per Share (EPS): ..............write formula only

P lease write just formula for every point and I will solve problem ,,,, Thanks alote

Answer 1

1. ROCE = Earnings before interest and tax / (Total assets - Current liabilities)

1.1. Altman’s Z-Score = (1.2 * A) + (1.4 * B) + (3.3 * C) + (0.6 * D) + (0.999 * E)

where

A = (Current assets - Current liabilities) / Total assets

B = Retained Earnings / Total assets

C = Earnings before interest and tax / Total assets

D = Book value of equity / Total liabilities

E = Sales / Total assets

2. Operating cash flow to current liabilities ratio = Cash flow from operations / Current liabilities

3. A\R turnover = Credit sales / Average accounts receivable

4. Inventory turnover = Cost of goods sold / Average inventory

5. Accounts payable turnover = Credit purchases / Average accounts payable

6. Interest coverage ratio = Earnings before interest and tax / Interest expense

7. Long-term debt ratio = Long-term debt / Shareholders' equity

8. Debt / equity ratio = Total debt / Shareholders' equity

9. Long-term debt to assets ratio = Long-term debt / Total assets

10. Interest coverage ratio = Earnings before interest and tax / Interest expense

11. Operating cash flow to total liabilities ratio = Cash flow from operations / Total liabilities

12. Earnings per share (EPS) = (Net income - Preferred dividends) / Weighted average number of shares outstanding