CO QAH + MELC LW

LEARNING WORKSHEET No. 6

Course Outline & Quality Assured Handouts in Fundamentals of Accounting,
paired with MELC- Based Learning Worksheet
Business, and Management 2

Name: CLINT WEST AUTIDA Grade & Section: ABM 12 - AYALA

Teacher: ARCIE CAGOMOC Date Submitted: __________________________

MELC: 1. The learners compute and interpret financial ratios such as current ratio, working capital, gros
profit ratio, net profit ratio, receivable turnover, inventory turnover, debt-to-equity ratio, and the like.
(ABM_FABM12-Ig-h-14)
Objective/Subtask:

1. To be able to distinguish the different financial ratios such as current ratio, working capital, gross profit ratio,
profit ratio, receivable turnover, inventory turnover, debt-to -equity ratio and the like.
2. To be able to compute various financial ratios and interprets the level of profitability, efficiency and financial health
the business.

Topic: ANALYSIS AND INTERPRETATION OF FINANCIAL STATEMENTS

Semester:1ST Week No. 6

Activity No. 1 “Choose me Up”

Directions: Choose the ratios on the box below and place on the right category. Write your answers
the table provided.

Asset Turnover Debt Ratio Return on Equity

Gross Profit Ratio Net Profit Margin Days in Inventory
Interest Coverage Ratio Return on Asset Debt Equity ratio
Current Ratio Working Capital Quick ratio
Operating Income Ratio Accounts Receivable Turnover
 PROFITABILITY RATIO OPERATIONAL FINANCIAL HEALTH RATIO
EFFICIENCY RATIO
Gross Profit Ratio Days in Inventory Debt Ratio

Return on Asset Asset Turnover Debt Equity Ratio

Net Profit Margin Accounts Receivable Turnover Interest Coverage Ratio

Return on Equity Working Capital

Operating Income Ratio Current Ratio

Quick Ratio

Activity No. 1 “Try to Compute and Interpret Me”

Directions: The following are the balances of accounts of D’ Trio Company at the end of Decemb
2020. Compute and interpret the required ratios. Show your solution and write your answers on t
table.
D’Trio Company
Statement of Financial Position
As of December 31, 2020
ASSETS

Cash Php 150,000.00

Accounts Receivable 260,000.00
Inventory 125,000.00

Total Current Assets 535,000.00

Property, plant & Equipment 305,000.00

Total Noncurrent Assets 305,000.00

TOTAL ASSETS Php 840,000.00

 LIABILITIES

Accounts Payable Php 170,000.00

Total Current Liabilities 170,000.00

Notes Payable 180,000.00

Total Noncurrent Liabilities 180,000.00

TOTAL LIABILITIES 350,000.00

EQUITY

D’Trio Capital 490,000.00

TOTAL LIABILITIES AND EQUITY Php 840,000.00

D’Trio Company
Statement of Comprehensive Income
As of December 31, 2020
Sales Php 550,000.00
Cost of Goods Sold 260,000.00
GROSS PROFIT 290,000.00
Expenses:
Operating Expense 90,000.00
Interest Expense 10,000.00
NET INCOME Php 190,000.00

RATIOS RESULTS INTERPRETATION / ANALYSIS

Gross Profit Ratio 290,000/550,000=0.53

Net profit Ratio 190,000/550,000=0.35

Return on Asset 190,000/550,000=0.23

Inventory 260,000/125,000=2.08
Turnover
Days in inventory 365/2.05=175.48

Accounts 550,000/170,000=3.24
Receivable
Turnover
Debt equity ratios 350,000/490,000=0.71

Debt Ratio 350,000/840,000=0.42

Current Ratio 535,000/170,000=3.15

Working Capital 530,000-170,000=365,000