Question: The following are industry average ratios : Total margin 5.20% Total asset turnover 3.84 times Equity multiplier 1.87 times Return on equity 28.35% Return on
The following are industry average ratios:
Total margin 5.20%
Total asset turnover 3.84 times
Equity multiplier 1.87 times
Return on equity 28.35%
Return on assets 14.50%
Current ratio 2.0 times
Days cash on hand 18.50 days
Average collection period 52 days
Debt ratio 55.0%
Debt-to-equity ratio 1.32
Times interest earned 2.20 times
Fixed asset turnover ratio 25.75 times
- Perform a Du Pont analysis on Park Ridge for 2019 and 2020.
- What do each of the 2020 component ratios tell us?
- How does each of the 2020 components compare to the industry average?
- How do each of the 2020 components compare to the 2019 components? (15 points)
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