- Current Ratio
Current Ratio= Current Assets /Current liability
Total Current assets= $129936
Current liabilities= $87622
Current ratio= 129939/87622
Current ratio= 1.48
A current ratio above 1 indicates that the business is able to pay all the current liabilities at that particular time using its assets.
- Quick Ratio
Quick Ratio= (Current Assets- inventory) /Current liability
Inventory = $ 88157
Current Assets- inventory= $129936- $88157
Current Assets- inventory= $41779
Quick ratio= 41779/87622
Quick ratio= 0.48
This quick ratio is below 1. It indicates that this business is heavily relying on inventory in paying of its liabilities.
- Debt Ratio
Debt ratio= Total debt/total assets
Total debt= Current liabilities+ long term liabilities
Total debt= $87622+ $119846
Total debt= $207468
Total assets=Current assets+ fixed assets
Total assets= $129936+ $280843
Total assets= $410779
Debt ratio= 207468/410779
Debt ratio= 0.505
- Debt-to-net worth ratio
Debt-to-net worth ratio = total debts / net worth
Total debt= $207468
New worth = total assets – total debts
Total assets= $410779
Total debt= $207468
Net worth= $410779- $207468
Net worth= $203311
Debt-to-net worth ratio = 207468/ 203311
Debt-to-net worth ratio = 1.02
The debt to net worth ratio above 1 indicates that the business owes more than its net worth.
- Times-interest-earned ratio
Times-interest-earned ratio= Earnings Before interest and Taxes (EBIT) /Total interest on bonds as well as other contractual dates.
Earnings Before interest and Taxes (EBIT)= Revenue- operating expenses
Revenue= $293564
Operating expenses= $212249
Earnings Before interest and Taxes (EBIT)= $293564- $212249
Earnings Before interest and Taxes (EBIT)= $81315
Total interest on bonds & contractual debts= $21978
Times-interest-earned ratio= $81315/ $21978
Times-interest-earned ratio= 3.7
This means that the business can cover its interest charges 3.7 times on its earnings before tax.
- Average-Inventory-Turnover ratio
Average-Inventory-Turnover ratio= Cost of goods sold / average inventory
Cost of goods sold= $395683
Average inventory= (current inventory + Beginning inventory)/2
Average inventory= ($88157 +$78271)/2
Average inventory= $83214
Average-Inventory-Turnover ratio=$395683/ $83214
Average-Inventory-Turnover ratio= 4.76
- Average-collection-Period Ratio
Average-collection-Period Ratio= (Days in Period x Average Accounts Receivable)/ Net Credit Sales
Average-collection-Period Ratio= (365 x 29152)/ 689247
Average-collection-Period Ratio= 15.4 days
- Average payable period ratio
Average payable period ratio= Average Accounts payable/ (total purchases/number of days)
Average payable period ratio= $54258($403569/365)
Average payable period ratio= 49.08 days
- Net-sales-to-total-assets ratio
Net-sales-to-total-assets ratio = (Gross sales – sales allowances and deductions) ÷ Total assets
Net-sales-to-total-assets ratio = 689247/280843
Net-sales-to-total-assets ratio= 24.54
- Net-profit-on-sales ratio
(Net profit/Net sales) x 100
(30189/ 689247) x 100= 4.32%
Net-profit-on-sales ratio= 4.32%
- Net-profit-to-Assets Ratio
Net-profit-to-Assets Ratio = Net Income / Total Assets
Net-profit-to-Assets Ratio = 30189/ 280843
Net-profit-to-Assets Ratio = 0.11
- Net-profit-to-equity ratio
Net-profit-to-equity ratio = Net profit/ Owner Equity
Net-profit-to-equity ratio =30189/280843
Net-profit-to-equity ratio = 0.11