2.04 - Ratio Analysis for Investment Planning - Problems

Question 1

Using information from the appendices, calculate the current ratio of Apex Manufacturing for 2018 and 2019.

Answer 1

The current ratio of Apex Manufacturing was 1.24 in 2018 and 1.72 in 2019.

Question 2

Using information from the appendices, calculate the current ratio of Compass Retail for 2018 and 2019.

Answer 2

The current ratio of Compass Retail was 1.89 in 2018 and 2.19 in 2019.

Question 3

Using information from the appendices, calculate the quick ratio of Apex Manufacturing for 2018 and 2019.

Answer 3

The quick ratio of Apex Manufacturing was 0.87 in 2018 and 1.28 in 2019.

Question 4

Using information from the appendices, calculate the quick ratio of Compass Retail for 2018 and 2019.

Answer 4

The quick ratio of Compass Retail was 0.49 in 2018 and 0.46 in 2019.

Question 5

Using information from the appendices, calculate the working capital of Apex Manufacturing for 2018 and 2019.

Answer 5

The working capital of Apex Manufacturing was $105,120 in 2018 and $339.000 in 2019.

Question 6

Using information from the appendices, calculate the working capital of Compass Retail for 2018 and 2019.

Answer 6

The working capital of Compass Retail was $277,800 in 2018 and $420,960 in 2019.

Question 7

Using information from the appendices, calculate the debt-to-equity ratio of Apex Manufacturing for 2018 and 2019.

Answer 7

The debt-to-equity ratio of Apex Manufacturing was 1.32 in 2018 and 0.85 in 2019.

Question 8

Using information from the appendices, calculate the debt-to-equity of Compass Retail for 2018 and 2019.

Answer 8

The debt-to-equity ratio of Compass Retail was 0.77 in 2018 and 0.63 in 2019.

Question 9

Using information from the appendices, calculate the debt-to-asset ratio of Apex Manufacturing for 2018 and 2019.

Answer 9

The debt-to-asset ratio of Apex Manufacturing was 57% in 2018 and 46% in 2019.

Question 10

Using information from the appendices, calculate the debt-to-asset ratio of Compass Retail for 2018 and 2019.

Answer 10

The debt-to-asset ratio of Compass Retail was 44% in 2018 and 38% in 2019.

Question 11

Using information from the appendices, calculate the interest coverage (times-interest-earned ratio) of Apex Manufacturing for 2018 and 2019.

Answer 11

The interest coverage of Apex Manufacturing was 13.98 times in 2018 and 12.53 times in 2019.

Question 12

Using information from the appendices, calculate the interest coverage (times-interest-earned ratio) of Compass Retail for 2018 and 2019.

Answer 12

The interest coverage of Compass Retail was 14.02 times in 2018 and 18.28 times in 2019.

Question 13

Using information from the appendices, calculate the gross profit margin of Apex Manufacturing for 2018 and 2019.

Answer 13

The gross profit margin of Apex Manufacturing was 69% in 2018 and 67% in 2019.

Question 14

Using information from the appendices, calculate the gross profit margin of Compass Retail for 2018 and 2019.

Answer 14

The gross profit margin of Compass Retail was 48% in 2018 and 46% in 2019.

Question 15

Using information from the appendices, calculate the operating profit margin of Apex Manufacturing for 2018 and 2019.

Answer 15

The operating profit margin of Apex Manufacturing was 27% in 2018 and 25% in 2019.

Question 16

Using information from the appendices, calculate the operating profit margin of Compass Retail for 2018 and 2019.

Answer 16

The operating profit margin of Compass Retail was 11% in 2018 and 13% in 2019.

Question 17

Using information from the appendices, calculate the net profit margin of Apex Manufacturing for 2018 and 2019.

Answer 17

The net profit margin of Apex Manufacturing was 19% in 2018 and 17% in 2019.

Question 18

Using information from the appendices, calculate the net profit margin of Compass Retail for 2018 and 2019.

Answer 18

The net profit margin of Compass Retail was 8% in 2018 and 9% in 2019.

Question 19

Using information from the appendices, calculate the return on common equity of Apex Manufacturing for 2018 and 2019.

Answer 19

The return on common equity of Apex Manufacturing was 82% in 2018 and 45% in 2019.

Question 20

Using information from the appendices, calculate the return on common equity of Compass Retail for 2018 and 2019.

Answer 20

The return on common equity of Compass Retail was 28% in 2018 and 28% in 2019.

Question 21

Using information from the appendices, calculate the return on total assets of Apex Manufacturing for 2018 and 2019.

Answer 21

The return on total assets of Apex Manufacturing was 27% in 2018 and 21% in 2019.

Question 22

Using information from the appendices, calculate the return on total assets of Compass Retail for 2018 and 2019.

Answer 22

The return on total assets of Compass Retail was 16% in 2018 and 17% in 2019.