Briefly analyze the ratios, then Construct only a list of strengths and a list w
ID: 2331417 • Letter: B
Question
Briefly analyze the ratios, then Construct only a list of strengths and a list weaknesses.
Gallery of Dreams
Ratios
Ratio
Industry
2015
2014
2013
Current
2.50x
4.48x
4.06x
3.48x
Quick
0.80x
1.47x
1.18x
0.96x
Average collection period
11 days
16 days
15 days
9 days
Inventory turnover
2.30x
1.19x
1.24x
1.37x
Days payable outstanding
15 days
11 days
12 days
8 days
Fixed asset turnover
17.50x
9.74x
9.09x
8.85x
Total asset turnover
2.80x
1.50x
1.67x
1.82x
Debt ratio
62.00%
29.47%
34.04%
39.17%
Long term debt to
total capitalization
25.53%
14.09%
18.91%
22.33%
Times interest earned
9.93x
22.02x
19.00x
14.23x
Fixed charge coverage
8.69x
4.59x
4.47x
4.25x
Gross profit margin
31.10%
59.21%
59.39%
58.52%
Operating profit margin
8.06%
22.05%
21.86%
20.52%
Net profit margin
4.32%
11.89%
11.00%
10.97%
Return on investment
9.21%
17.97%
18.28%
18.35%
Return on equity
11.34%
24.14%
27.51%
29.88%
Gallery of Dreams
Ratios
Ratio
Industry
2015
2014
2013
Current
2.50x
4.48x
4.06x
3.48x
Quick
0.80x
1.47x
1.18x
0.96x
Average collection period
11 days
16 days
15 days
9 days
Inventory turnover
2.30x
1.19x
1.24x
1.37x
Days payable outstanding
15 days
11 days
12 days
8 days
Fixed asset turnover
17.50x
9.74x
9.09x
8.85x
Total asset turnover
2.80x
1.50x
1.67x
1.82x
Debt ratio
62.00%
29.47%
34.04%
39.17%
Long term debt to
total capitalization
25.53%
14.09%
18.91%
22.33%
Times interest earned
9.93x
22.02x
19.00x
14.23x
Fixed charge coverage
8.69x
4.59x
4.47x
4.25x
Gross profit margin
31.10%
59.21%
59.39%
58.52%
Operating profit margin
8.06%
22.05%
21.86%
20.52%
Net profit margin
4.32%
11.89%
11.00%
10.97%
Return on investment
9.21%
17.97%
18.28%
18.35%
Return on equity
11.34%
24.14%
27.51%
29.88%
Explanation / Answer
Answer:
Here we have to explain the given ratio's strengths and weakness,
They are,
Therefore,the above points are clearly stated that the strngths and weakness of the given ratio's.