Need help in explaining what each of the 10 ratios says about the company's health RATIO
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Need help in explaining what each of the 10 ratios says about the company's health
RATIO | Formula | 9/30/2022 | ||
1. Working capital | Current Assets - Current Liabilities | -1,589,000 (4,444,000 - 6,033,000) | ||
2. Current ratio
| Current Assets / Current Liabilities | 0.74 (4444,000 / 6,033,000) | ||
3. Debt ratio
| Total Liabilities / Total Assets | 0.75 (14,278,000 / 19,016,000) | ||
4. Earnings per share
| Net Income / Weighted Average Common shares outstanding | 0.901 (3,100,000 / 3.440.000) | ||
5. Price/earnings ratio
| Share Price / EPS | 77.4 (69.66 / 0.90) | ||
6. Total asset turnover ratio
| Total revenue / Total assets | 0.21 (3,946,000 / 19,016,000) | ||
7. Financial leverage
| Total Assets / Shareholder's Equity | 4.01 (19,016,000 / 4,738,000) | | |
8. Net profit margin
| Net Income / Total Revenue | 78.56% (3,100,000 / 3,946,000) | ||
9. Return on assets
| Net Income / Total Assets | 16.30 (3,100,000 / 19,016,000) | ||
10. Return on equity
| Net Income - Preference Dividend / Shareholder's equity | 65.43% (3,100,000 - 0 / 4,738,000) |
Related Book For
Financial Accounting
ISBN: 978-0134564142
6th Canadian edition
Authors: Walter Jr. Harrison, Charles T. Horngren, C. William Thomas, Greg Berberich, Catherine Seguin
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