External Financing
morpre
table_3.2_summary_of_financial_ratios.docxTABLE 3-2 MicroDrive Inc.: Summary of Financial Ratios (Millions of Dollars)
|
RATIO |
FORMULA |
CALCULATION |
RATIO |
INDUSTRY AVERAGE |
COMMENT |
|
Liquidity |
|
|
3.2 |
4.2 |
Poor |
|
Quick |
|
|
1.2 |
2.1 |
Poor |
|
Asset Management |
|
|
|
|
|
|
Inventory turnover |
|
|
4.9 |
9.0 |
Poor |
|
Days sales outstanding (DSO) |
|
|
45.6 |
36.0 |
Poor |
|
Fixed assets turnover |
|
|
3.0 |
3.0 |
OK |
|
Total assets turnover |
|
|
1.5 |
1.8 |
Poor |
|
Debt Management |
|
|
|
|
|
|
Debt ratio |
|
|
53.2% |
40.0% |
High (risky) |
|
Times-interest-earned (TIE) |
|
|
3.2 |
6.0 |
Low (risky) |
|
EBITDA coverage |
|
|
3.0 |
4.3 |
Low (risky) |
|
Profitability |
|
|
|
|
|
|
Profit margin on sales |
|
|
3.8% |
5.0% |
Poor |
|
Basic earning power (BEP) |
|
|
14.2% |
17.2% |
Poor |
|
Return on total assets (ROA) |
|
|
5.7% |
9.0% |
Poor |
|
Return on common equity (ROE) |
|
|
12.7% |
15.0% |
Poor |
|
Market Value |
|
|
|
|
|
|
Price/earnings (P/E) |
|
|
10.1 |
12.5 |
Low |
|
Price/cash flow |
|
|
5.4 |
6.8 |
Low |
|
Market/book (M/B) |
|
|
1.3 |
1.7 |
Low |
