Compute the following ratios for Stowe Enterprises for 2014 and 2015: Financial statement information Short-TermAsset Management Long-Term
Question:
Compute the following ratios for Stowe Enterprises for 2014 and 2015:
Financial statement information
Short-TermAsset Management Long-Term Solvency Profitability Solvency Ratios Ratios Current ratio Total asset turnover Debt ratio Quick ratioInventory turnoverDebt-to-equity ratio Return on assets Cash ratio Ratios Ratios Profit margin Receivables turnover Equity multiplierReturn on equity Interest coverage Cash coverage ratio STOWE ENTERPRISES Sales Cost af goods sold Depreciation Earnings before interest and taxes Interest paid Taxable income 2015 Statement of Comprchensive Income $4,500 2,400 500 S1,600 480 S1,120 380 S 740 S 186 S 554 Net income Addition to retained earnings Dividends STOWE ENTERPRISES Abbreviated Statement of Financial Position, 2014-2015 Assets 2014 2015 Liabilitics and 2014 2015 sharcholders cquity Current liabilities Current assets Cash Accounts receivable Inventory Fixed assets Net plant and equipment s 8001,800 Accounts payable 1,950 3,135 1,550 1,630 1,629 1,380 625 3,487 3,780 2,040 Notes payable 2,300 Other 746 Long-term debt Shareholders equity 4,620 5,130 common shares 570 1,146 Accumulated retained earnings Total liabilitics and 2,523 2,709 Total assets $10,505 $11270 sharcholders' equity S10,505 S11,270
Step by Step Answer:
Shortterm Solvency Ratios Current ratio for 2014 800 19503135 1550 1629 746 150 Current ratio for 20...View the full answer
Corporate Finance
ISBN: 978-0071339575
7th Canadian Edition
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe, Gordon Ro
Related Video
Inventory turnover is a key metric that helps businesses evaluate the efficiency of their operations. A high turnover ratio is generally considered positive, indicating that the company is effectively selling its inventory and making efficient use of its resources. On the other hand, a low turnover ratio may indicate issues such as overstocking or slow sales and may require further examination to identify and address the underlying causes. Businesses use this ratio to make decisions about inventory levels, production schedules, and pricing strategies. It also helps businesses to identify areas where they may need to make improvements, such as reducing lead times for production or optimizing sales and marketing efforts. Additionally, inventory turnover is used by investors and analysts as a key performance indicator to evaluate the financial health and growth potential of a company.
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