You are a financial analyst with a large Washington investment firm. You have been asked by your client who is looking to invest in Lewis Inc. to do an analysis of the financial statements and other data she has provided to you. Below is the information that she has. 

Required:

perform the ratio analysis and answer the below questions:

Current ratio
Quick ratio
days sales outstanding
total assets turnover ratio
Inventory turnover ratio
TIE
Debt to capital ratio
ROA
ROE
BEP
Profit margin
Operating margin
dividends per share
EPS
P/E ratio
book value per share

The balance sheet and income statement shown below are for Lewis Inc. Note that the company has no amortization charges, it does not lease any assets, none of its debt must be retired during the next 5 years, and the notes payable will be rolled over.

 
 
 

Transcribed Image Text:

Balance Sheet (Millions of $) Assets Cash and securities Accounts receivable Inventories Total current assets Net plant and equipment Total assets Liabilities and Equity Accounts payable Accruals Notes payable Total current liabilities 2019 $4,200 17,500 20,300 $42,000 $28,000 $70,000 $22,509 14,391 6,000 $42,900 Balance Sheet (Millions of $) Assets Cash and securities Accounts receivable Inventories Total current assets Net plant and equipment Total assets Liabilities and Equity Accounts payable Accruals Notes payable Total current liabilities 2019 $4,200 17,500 20,300 $42,000 $28,000 $70,000 $22,509 14,391 6,000 $42,900

Answer rating: 100% (QA)

To perform the ratio analysis we need to calculate various ratios using the financial data provided 1 Current ratio Current Assets Current Liabilities 42000 42900 098 2 Quick ratio Current Assets Inve... View the full answer