Eleanors Computers is a retailer of computer products. Using the financial data provided, complete the financialratio calculations
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Eleanor’s Computers is a retailer of computer products. Using the financial data provided, complete the financialratio calculations for 2016. Advise management of any ratios that indicate potential problems and provide an explanation of possible causes of the problems.
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Financial Ratios 2014 2015 2016 Industry Averages 2016 Current ratio 1.71X 1.65X 1.70X Quick ratio 0.92X 0.89X 0.95X Average collection period 60 days 60 days 65 days Inventory turnover 4.20X 3.90X 4.50X Fixed asset turnover 3.20X 3.33X 3.00X Total asset turnover 1.40X 1.35X 1.37X Debt ratio 59.20% 61.00% 60.00% Times interest earned 4.20X 3.70X 4.75X Gross profit margin 25.00% 23.00% 22.50% Operating profit margin 12.50% 12.70% 12.50% Net profit margin 6.10% 6.00% 6.50% Return on total assets 8.54% 8.10% 8.91% Return on equity 20.93% 20.74% 22.28%
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Related Book For
Understanding Financial Statements
ISBN: 9781292101552
11th Global Edition
Authors: Lyn Fraser, Aileen M. Ormiston
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