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Ch16 C5 (1)

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Chapter 16, C 5.
All computations are for the years ended December 31, 2008 and December 29, 2007.
Liquidity ratios and analysis of CVS (in millions).
2008 2007
Current ratio = times = times
Quick ratio + +
= = times = = times
Receivable turnover
( + ) ÷ ( + ) ÷
= = times = = times
Days' sales uncollected days = days days = days
times times
Inventory turnover
( + ) ÷ ( + ) ÷
= = times = = times
Days' inventory on hand days = days days = days
times times
Payables turnover + +
( + ) ÷ ( + ) ÷
= = times = = times
Days' payable days = days days = days
times times
* Cash includes short-term investments.

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*

Ch16 C5 (2)

Chapter 16, C 5. (Continued)
Profitability ratios and analysis of CVS (in millions).
2008 2007
Profit margin = =
Asset turnover
( + ) ÷ ( + ) ÷
= = times = = times
Return on assets = =
Return on equity
( + ) ÷ ( + ) ÷
= = = =

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Ch16 C5 (3)

Chapter 16, C 5. (Continued)
Long-term solvency ratios and analysis of CVS (in millions)
2008 2007
Debt to equity ratio = times = times
Interest coverage ratio + = times + = times
Cash flow adequacy ratios and analysis of CVS (in millions).
2008 2007
Cash flow yield = times = times
Cash flows to sales = =
Cash flows to assets $ — 0 $ — 0
( + ) ÷ ( + ) ÷
= = = =
Free cash flow – – – –
+ = + =

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Ch16 C5 (4)

Chapter 16, C 5. (Continued)
Market strength ratios and analysis of CVS.
2008 2007
Price/earnings (P/E) ratio = times = times
Dividends yield = =
* 2008: ( + ) ÷
** 2007: ( + ) ÷

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* +

** +

* +

* +