Overall Profitability

Sales (all on credit) ### ROE

Cost of goods sold 575,000 ROA
Gross profit 500,000
Operating expenses 305,000 ROIC
Operating income (EBIT) 195,000 Activity Ratios
Interest expense 20,400 TA Turnover
Income before taxes 174,600 FA Turnover
Income taxes 74,000 CA Turnover
Net income 100,600 Inventory TO
Dividend 48,000 DSI (days)
AR Turnover
Balance sheet data: DSO / Collection Period
Cash 38,400 Operating Cycle
Accounts receivable 120,000 Days' Payables or DPO
Inventory 56,700 CCC = Op Cycle-DPO
Prepaid Expenses 24,000
Total current assets 239,100 * COGS instead of purchase
Total plant assets 708,900
Total assets 948,000 Invested Capital
Tax Rate
Accounts payable 91,200 EBIAT or NOPAT
Interest payable 4,800 DPS
Long-term liabilities 204,000 EPS
Total liabilities 300,000
Common stock, $10 par 480,000 EBIAT or NOPAT
Retained earnings 168,000 N
Total liabilities and equity 948,000

Market Price per Share 25

 Profitability
PAT/E 15.52% =B10/(B26+B27) Gross Margin Ratio GP/Sales
PAT/TA 10.61% =B10/C20 Operating Margin Ratio EBIT/Sales
(PAT+Int(1-t))/TA 11.85% =G22/C20 Net Margin Ratio PAT/Sales
(PAT+Int(1-t))/IC 13.19% =G22/G20 EBITDA Margin Ratio EBITDA/Sales
Leverage and Liquidity
Rev/TA 1.1 =B2/C20 Current Ratio CA/CL
Rev/FA 1.5 =B2/B19 Quick Ratio
Rev/CA 4.5 =B2/B18 TL/TA TL/TA
COGS/Inv 10.1 =B3/B16 D/E ratio LTD/E
Inventory/(COGS/365) 36.0 =B16/(B3/365) Times Interest Earned (ICREBIT/INT
Rev/AR 9.0 =B2/B15
AR/(rev/365) 40.7 =B15/(B2/365) Market Value and Dividend Policy
=DSI+DSO 76.7 =G13+G11 Dividend Payout Div/PAT
AP/(Purchases*/365) 57.89 =B22/(B3/365) Dividend Yield DPS/PPS
18.84 =G14-G15 P/E Ratio PPS/EPS

(E+LTD) or (E+interest b 852,000 =SUM(B26+B24+B27) Current Assets(CA)

Taxes/PBT 42% =B9/B8 Current Laibilities (CL)
PAT+interest(1-t) 112353.9519 =B10+B7*(1-G21) Working Capital CA-CL
Div/N #N/A Operating Cycle
PAT/N Cash Cycle

EBIT*(1-T) 112353.9519 =B6*(1-G21)

Total CS/FV 48000 =B26/10
 46.5% =B4/B2
18.1% =B6/B2
9.4% =B10/B2
#N/A

2.49 =B18/(B22+B23)
1.65 =(B18-B16-B17)/(B22+B23)
#N/A
0.314814815 =B24/(B26+B27)
9.558823529 =B6/B7
Unidentified Balance Sheet
A B C D E
Balance Sheet Percentages
Cash 7.60% 2.70% 1.40% 7.20% 12.70%
Receivables 31.7 4.7 2.9 60.3 11.5
Inventories 5.3 2.0 23.0 8.7 48.1
Other current assets 1.2 3.0 1.8 7.3 0.0
Property and equipment (net) 30.2 66.6 49.9 4.3 25.0
Other assets 24.0 21.0 21.0 12.2 2.7
Total assets 100.00% 100.00% 100.00% 100.00% 100.00%

Notes payable 38.40% 4.20% 4.60% 50.80% 0.90%

Accounts payable 5.5 3.0 20.0 15.2 21.5
Other current liabilities 1.5 4.7 12.7 5.7 27.4
Long-term debt 17.4 30.0 37.5 22.7 8.1
Other liabilities 26.5 22.9 9.8 1.3 8.1
Owners’ equity 10.7 35.2 15.4 4.3 34.0
Total liabilities and equity 100.00% 100.00% 100.00% 100.00% 100.00%
Selected Ratios
Net profits/net sales .04 .14 .02 .01 .05
Net profits/total assets .03 .05 .06 .01 .03
Net profits/owners’ equity .29 .14 .41 .13 .10
Net sales/total assets .78 .36 3.2 2.1 .67
Collection period (days) 149 48 3 106 63
Inventory turnover 11 10 10 23 1.1
Total liabilities/total assets .89 .65 .85 .96 .66
Long-term debt/owners equity 1.6 .85 2.4 5.3 .24
Quick ratio .9 .9 .2 .9 .5
The data below present key ratios for six well-known U.S. corporations: Apple, Boeing,
Citigroup, Facebook, McDonald’s, and Walmart. However, the companies are not listed in
order, and their names have been removed from the column headings. Using only your
understanding of the ratios and the nature of each company listed, match each of the sets of
ratios with the appropriate company.

Walmart McDonald’s Boeing Facebook CitiGroup Apple

Return on Equity (ttm) 15.53% N/A 29.07% 9.15% N/A 149.27%
Return on Assets (ttm) 6.31% -0.89% 16.74% 0.78% 12.43% 21.69%
Profit Margin 2.26% -8.00% 31.20% 25.17% 29.93% 26.41%
Operating Margin (ttm) 4.23% -3.34% 36.69% 30.82% 42.69% 30.93%
Trailing P/E 24.45 N/A 15.12 5.83 24.18 22.33
Asset turnover (X) 2.36 0.97 0.52 0.04 0.8 0.88
Collection period (days) 4.7 28.34 34.08 NA 15.92 17.4
Inventory turnover (X) 8.11 1.75 NA NA 163.35 71.14
Debt to equity (%) 76 61.54 2.34 221.3 86.25 14.11
Times interest earned (X) 13.5 33.05 10 2.21 21.74 NA
Current ratio (X) 0.88 1.23 13.56 0.38 1.56 1.63
Acid test (X) 0.21 0.38 13.56 0.38 1.53 1.59
(NA = Not applicable)

Profit Margin 2.26% -8.00% 31.20% 25.17% 29.93% 26.41%

Operating Margin (ttm) 4.23% -3.34% 36.69% 30.82% 42.69% 30.93%
Management Effectiveness
Return on Assets (ttm) 6.31% -0.89% 16.74% 0.78% 12.43% 21.69%
Return on Equity (ttm) 15.53% N/A 29.07% 9.15% N/A 149.27%
MEN'S WEARHOUSE INC. Overall Profitability
BALANCE SHEET ($ millions) 2008 ROE
ASSETS ROA
Cash & Short-Term Investments 99.367
Net Receivables 24.872 ROIC
Inventories 492.423 Activity Ratios
Prepaid Expenses 27.179 TA Turnover
Other Current Assets 27.154 FA Turnover / Capital Intensity
Total Current Assets 670.995 CA Turnover
Gross Plant, Property & Equipment 865.084 Inventory TO
Accumulated Depreciation 454.917 DSI
Net Plant, Property & Equipment 410.167 AR Turnover
Other Assets 99.696 DSO / Collection Period
TOTAL ASSETS 1,180.858 WC Turnover
LIABILITIES Days' Payables or DPO
Accounts Payable 146.713 CCC
Taxes Payable 5.590 Operating Cycle
Accrued Expenses 70.222
Other Current Liabilities 54.730
Total Current Liabilities 277.255 Invested Capital
Long Term Debt 96.399 Tax Rate
Other Liabilities 66.876 EBIAT or NOPAT
TOTAL LIABILITIES 440.530 DPS
EQUITY EPS
Common Stock 514.790
Securities Premium 105.209
Retained Earnings 120.329
TOTAL EQUITY 740.328
TOTAL LIABILITIES & EQUITY 1,180.858

INCOME STATEMENT ($ millions, except per share)

2008
Sales 2,112.558
Cost of Goods Sold 1,062.205
Gross Profit 1,050.353
Selling, General, & Administrative Exp. 741.405
Operating Income Before Deprec. 308.948
Depreciation, Depletion, & Amortization 80.296
Operating Profit 228.652

Interest Expense 5.046

Pretax Income 223.606
Total Income Taxes 82.552
Net Income 141.054
Common Shares Outstanding 51.479
Dividends Per Share 0.430
Price Per share 62.100
 Solution Profitability
PAT/E 22.21% Gross Margin Ratio GP/Sales
PAT/TA 11.95% Operating Margin Ratio EBIT/Sales
(PAT+Int(1-t))/TA 11.95% Net Margin Ratio PAT/Sales
(PAT+Int(1-t))/IC 19.28% EBITDA Margin Ratio EBITDA/Sales
Leverage and Liquidity
Rev/TA 1.79 Current Ratio CA/CL
Rev/FA 5.15 Quick Ratio (CA-Inv)/CL
Rev/CA 3.15 Debt/Equity Ratio TL/E
COGS/Inv 2.16 LTD/E
Inventory/(COGS/365) 169.21 Times Interest Earned (ICR) EBIT/INT
Rev/AR 84.94
AR/(rev/365) 4.30 Market Value and Dividend Policy
Rev/WC 5.37 Dividend Payout Div/PAT
AP/(op exp/365) 50.41 Dividend Yield DPS/EPS
Operating cycle-DPO 123.09 P/E Ratio PPS/EPS
DSI+DSO 173.51

(E+LTD) or (E+interest bearing Debt) 731.518 Current Assets(CA)

Taxes/PBT 36.92% Current Laibilities (CL)
PAT+interest(1-t) 141.054 Working Capital CA-CL
Div/N 0.430 Operating Cycle
PAT/N 2.740 Cash Cycle
 0.497
0.106
0.067
0.497

2.420
0.644
0.595

44.314

0.157
22.664

670.995
277.255
393.740
173.506
123.092