Question

Advanced Micro Devices, a global technology company, reported the following selected items as part of its 2019 annual report (dollars in millions):

INSTRUCTIONS:

Compute the following ratios:
1. Current ratio
2. Quick ratio
3. Receivable turnover (time and days)
4. Interest coverage
5. Return on assets
6. Inventory turnover (times and days)
7. Return on equity

 

Answer 1

1.

Current ratio = current assets/current liabilities

= 4597/6028

= 76.2%

2.

Quick ratio = current assets – inventories/ current liabilities

= 4597-982/2359

= 153%

3.

Receivable turnover ratio = Net sales/Account receivable

= 6371/1859

= 3.43 times

4.

Interest coverage = EBIT/Interest expense

= 372/94

= 3.96%

5.

Return on Assets = Net Income / Total Assets

= 341/6028

= 5.66%

6.

Inventory turnover = Cost of goods sold / Inventory

= 3863/982

= 3.93 times

7.

Return on equity = Net Income/Shareholders equity

= 341/2827

= 12.1%

12.1%