Assignment Instructions/ Description
Part I: Calculate the following ratios based on the Income Statement and Balance Sheet:
Profitability Ratios:1. Profit Margin = Net Income / Total Sales2. Return on assets = Net Income / Total Assets3. Return on equity = Net Income / Stockholders' Equity
Asset Utilization Ratios:4. Receivables turnover = Sales on credit / accounts receivable5. Average collection period = Accounts receivable / Average daily credit sales6. Inventory turnover = Sales / Inventory7. Fixed asset turnover = Sales / Fixed assets8. Total asset turnover = Sales / Total assets
Liquidity Ratios:9. Current ratio = Current assets / Current liabilities10. Quick ratio = Current assets - inventory / current liabilities
Debt Utilization Ratios:11. Debt to total assets = Total debt / Total assets12. Times interest earned = Income before interest and taxes / Interest paid13. Fixed charge coverage = Income before fixed charges (exclude lease payments) / Fixed charges
Part II: Go to BizStats: BizStatsGo to Financial Benchmark and select corporationEnter $4,000,000 for annual revenuesSelect ManufacturingSelect machinery manufacturingSelect metal working
Compare the industrial financial ratios with the ratios calculated in Part I for National American Corporation
Go to "Other Useful" category in BizStatsSelect Value Rule of ThumbSelect Engineering Services as our industry standardCalculate the value of National American Corporation based on the Engineering rule of thumb
Submit this assignment to the dropbox "LP10 Assignment: National American Corporation." You can navigate to this dropbox by clicking the “next” arrow at the top right of your screen. This assignment is worth 75 points and will be graded according to the scoring guide below.
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