Discuss Financial Management
Discuss Financial Management
Locate a publicly traded U.S. company of your choice. Then, calculate the following ratios for the company for 2012 and 2013:
Liquidity Ratios
o Current ratio [current assets / current liabilities]
o Quick ratio [(current assets – inventory) / current liabilities]
· Asset Turnover Ratios
o Collection period [accounts receivable / average daily sales]
o Inventory turnover [cost of goods sold / ending inventory]
o Fixed asset turnover [sales / net fixed assets]
· Financial Leverage Ratios
o Debt-to-asset ratio [total liabilities / total assets]
o Debt-to-equity ratio [total liabilities / total stockholders’ equity]
o Times-interest-earned (TIE) ratio [EBIT / interest]
· Profitability Ratios
o Net profit margin [net income / sales]
o Return on assets (ROA) [net income / total assets]
o Return on equity (ROE) [net income / total stockholders’ equity]
· Market-Based Ratios
o Price-to-earnings (P/E) ratio [stock price / earnings per share]
o Price-to-book (P/B) ratio [market value of common stock / total stockholders’ equity]
Discuss Financial Management
Locate a publicly traded U.S. company of your choice. Then, calculate the following ratios for the company for 2012 and 2013:
Liquidity Ratios
o Current ratio [current assets / current liabilities]
o Quick ratio [(current assets – inventory) / current liabilities]
· Asset Turnover Ratios
o Collection period [accounts receivable / average daily sales]
o Inventory turnover [cost of goods sold / ending inventory]
o Fixed asset turnover [sales / net fixed assets]
· Financial Leverage Ratios
o Debt-to-asset ratio [total liabilities / total assets]
o Debt-to-equity ratio [total liabilities / total stockholders’ equity]
o Times-interest-earned (TIE) ratio [EBIT / interest]
· Profitability Ratios
o Net profit margin [net income / sales]
o Return on assets (ROA) [net income / total assets]
o Return on equity (ROE) [net income / total stockholders’ equity]
· Market-Based Ratios
o Price-to-earnings (P/E) ratio [stock price / earnings per share]
o Price-to-book (P/B) ratio [market value of common stock / total stockholders’ equity]