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aleksandrvk [35]
2 years ago
5

Balance Sheet

Business
1 answer:
anyanavicka [17]2 years ago
7 0

Answer:

a.  current ratio  = 1.98

b. average collection period = 32.85 days

c.  debt ratio = 35,56%

d. total asset turnover ratio = 1.11 times

e.  operating profit margin  = 47,50%

f.  inventory turnover ratio = 2 times

Explanation:

a.  current ratio

Current ratio  = Current Assets / Current Liabilities

                     = 3,075,000 / 1,550,000

                     = 1.98

b. average collection period.

Average collection period = Accounts Receivable / (Sales / 365)

                                            = 900,000 / (10,000,000 / 365)

                                            = 32.85 days

c.  debt ratio.

Debt ratio = Interest bearing debt / Total Assets × 100

                 = (700,000+2,500,000)/ 9,000,000 × 100

                 = 35,56%

d. total asset turnover ratio.

Total asset turnover ratio = Sales / Total Assets

                                          = 10,000,000 / 9,000,000

                                          = 1.11 times

e.  operating profit margin

Operating profit margin  = Operating Profit / Sales × 100

                                       = (4,550,000+200,000) / 10,000,000 × 100

                                       = 47,50%

f.  inventory turnover ratio

Inventory turnover ratio = Cost of Sales / Inventory

                                        = 3,000,000 / 1,500,000

                                        = 2 times

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