Over the past year, M.D. Ryngaert and Co. has realized an increase in its current ratio - 25334

Solution Posted by
SuperPower

SuperPower

Rating : (21)A
Solution Detail
Price: $8.99
  • From: Business,
  • Posted on: Wed 18 Sep, 2013
  • Request id: None
  • Purchased: 5 time(s)
  • Average Rating: No rating
Request Description

Chapter 3

Questions

3-3

Over the past year, M.D. Ryngaert and Co. has realized an increase in its current ratio and a drop in its total assets turnover ratio. However, the company’s sales, quick ratio, and fixed assets turnover ratio have remained constant. What explains these changes?

3-5

How might (a) seasonal factors and (b) different growth rates distort a comparative ratio analysis? Give some examples. How might these problems be alleviated?

3-6

Why is it sometimes misleading to compare a company’s financial ratio with those of other firms that operate in the same industry?

 

Problems

3-1 Days Sales Outstanding

Greene Sisters has a DSO of 20 days. The company’s average daily sales are $20,000. What is the level of its accounts receivable? Assume there are 365 days in a year.

3-6 Du Pont Analysis

Donaldson and Son has an ROA of 10%, a 2% profit margin, and a return on equity equal to 15%. What is the company’s total asset turnover? What is the firm’s equity multiplier?

3-11 Balance Sheet Analysis

Complete the balance sheet and sales information in the table that follows for Hoffmeister Industries using the following financial data:

            Debt ratio: 50%

            Quick ration: 0.80

            Total assets turnover: 1.5

            Days sales outstanding: 365 days*

            Gross profit margin on sales: (Sales – Cost of goods sold) /Sales = 25%

            Inventory turnover ratio: 5.0

Solution Description

Previously, thank you for purchasing my tutorial. I try to

Attachments
Chapter 3 - Problem 3-1 and 3-6 Solutions (All Questions Answered + Formulas).xlsx
Chapter 3 - Pro...
Chapter 3 - Solutions for 3-13 - Balance Sheet Analysis (All Questions Answered + Formulas).xls
Chapter 3 - Sol...
Chapter 3 - Solutions for 3-3, 3-5, and 3-6 (All Questions Answered).doc
Chapter 3 - Sol...