Instructions:

Compute for the following ratios. Submit using the text field only. Round off your answers to two decimal
places.

Answer in vertical order the following numbers 1- 10 in good order. Use the 2018 data. You may answer
directly. Late submission and not following instructions less 20 points each.

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 1. Current ratio= 284,000 / 104,100= 2.73

2. Quick ratio= (47,500 + 115,000 + 21,500) / 104,100 = 1.77

3. Inventory Turnover= 153,000 / 48,000= 3.19

4. Days Sales Outstanding= (21,500 / 238,000) x 365= 32.97

5. Total assets turnover= 238,000 / 284,000= 0.84

6. Debt to equity ratio= 104,100 / 179,900= 0.58

7. Interest Coverage Ratio= 4,900/ 3,500= 1.4

8. Basic Earning Power Ratio= 4,900/ 284,000= 0.02

9. Operating Margin Ratio= 4,900/ 238,000= 0.02

10. Net Profit Ratio= 4,340/ 238,000= 0.02

 Net Profit Ratio Example:

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 Required: Determine the net profit ratio of Hafza Company using the data from above income statement.

Solution

$304,000/$2,025,000

= 0.1501

or

= 15.01%

 Finding EBIT
1. Take the value for revenue or sales from the top of the income statement.
2. Subtract the cost of goods sold from revenue or sales, which gives you gross profit.
3. Subtract the operating expenses from the gross profit figure to achieve EBIT.
 Finding Inventory Turnover
Inventory turnover = COGS / Average Inventory Value

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