Ratio Analysis

Ratio Analysis
Paris Higgs
ACC 201
Mr. Morrison
July 20, 2012
Chapter 9: 9-23 Ratio Analysis
Problem 9-23 map the financial statements for Bernard Company from Problem 9-22 to calculate the following ratios for 2012 and 2011.
A. work capital
2012 - $576,000 - $151,800 = $424,200
2011 - $516,000 - $121,000 = 395,000
B. Current Ratio
2012 -$576,000/$151,800 = $3.79: 1
2011 - $516,000/$121,000 = $4.26 : 1
C. Quick Ratio
2012 - $90,000/$151,800 = .6 : 1
2011 - $64,000/$121,000 = .5 : 1
D. Acct Receivable Turnover
2012 - $238,000/$50,000 = 4.76 times
2011 - $215,000/$46,500 = 4.62 times
E. number look of days to collect accounts receivable
2012 - 365/4.76 = 76.68 = 77 days
2011 - 365/4.62 = 79.00 = 79 days
F. Inventory Turnover
2012 - $120,000/$139,000 = .86 times
2011 - $103,000/$141,500 = .73 times

G. Average number of days to sell inventory
2012 - 365/.86 = 424.42 = 424 days
2011 - 365/.73 = 500 days
H. Debt to assets Ratio
2012 - $151,800/$576,000 = .26: 1
2011 - $121,000/$516,000 = .23: 1
I. Debt to equity Ratio
2012 - $151,800/$292,200 = .52: 1
2011 - $121,000/$268,000 = .45: 1
J. generation interest earned
2012 - $63,000/$8,000 = 7.875 = 7.88 times
2011 - $61,000/$7,000 = 8.472 = 8.47 times
K.



Plant sales to long term debt
2012 - $270,000/$132,000 = 2.05: 1
2011 - $255,000/$127,000 = 2.01: 1
L. simoleons Margin
2012 - $32,000/$230,000 = .14%
2011 -$32,800/$210,000 = .16%
M. Asset turnover Ratio
2012 - $230,000/$546,000 = .42: 1
2011 - $210,000/$516,000 = .41: 1

N. Return to Investment
2012 - $32,000/$546,000 = .0586% = .059 %
2011 - $32,800/$516,000 = .060%
O. Return to Equity
2012 - $32,000/$280,100 = .11%
2011 - $32,800/4268,000 = .12%
P. Earnings per share
2012 - $32,000/$40,000 = $.80
2011 - $32,800/$40,000 = $.82
Q. carry Value per Common stock
2012 - $222,200/$40,000 = $5.56
2011 - $198,000/$40,000 = $4.95
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