SUO_FIN2030_Quantitative Assignment,Week 1. Part 3. 3-6 A,, 3-5
HonestAbeRatio Analysis
Evaluate the performance of this company relative to its peers (cross-sectional analysis) and over time (time series analysis). Poor (P), Satisfactory (S), or Good (G). Calculate the percentage change and percent difference in each evaluation.
RATIO | Year1 | Year2 | Industry Norm | Cross-Section Evaluation | Trend or Time Series Evaluation | ||
Liquidity: |
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| % D |
| % Δ |
Current Ratio | 6.0x | 4.0x | 5.0x |
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Acid-test (Quick) Ratio | 3.25x | 1.92x | 3.0x |
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Operating efficiency: |
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| % D |
| % Δ |
Total Asset Turnover | .5x | .56x | .75x |
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Average Collection Period | 137 days | 107 days | 90 days |
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Inventory Turnover | 1.27x | 1.36x | 2.2x |
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Fixed Asset Turnover | 1.0x | 1.04x | 1.00x |
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Financing: |
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| % D |
| % Δ |
Debt Ratio | 33% | 34.60% | 33% |
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Times Interest Earned | 5.0x | 5.63x | 7.0x |
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Rate of return on common stockholders’ investment: |
| % D |
| % Δ | |||
Return on Common Equity | 7.50% | 10.50% | 9.00% |
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Make an evaluation of the areas of Liquidity, Asset Management, Leverage, and Profitability.
Economic Value Added
Determine the missing data. Calculate the EVA for the following data. Assume the cost of capital is 12 percent (0.12), capital invested is 1810, and the tax rate is 40% (0.40). All data is millions of dollars.
Net Sales | $3000 |
Operating Expenses | 2616.2 |
Depreciation | 100 |
EBIT | 283.8 |
Interest Expense | ? |
EBT | ? |
Taxes | 78.3 |
Net Income | ? |
12 years ago
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suo_fin2030_quantitative_assignmentweek_1._part_3._3-6_a_3-5.doc
