Ratio Analysis Problems | ||||||||||
Ratio Analysis | ||||||||||
( Individual Assignment ) | ||||||||||
You may use excel or word . doc format for this assignment . | ||||||||||
Please post your homework as a word . doc or excel file in the class | ||||||||||
discussion section below by the due date . | ||||||||||
1 . Analysis of cost of goods sold problem . | ||||||||||
1992 |
1993 |
1994 |
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Gross Profit Margin |
60 % |
55 % |
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51 % |
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What is happening to cost of goods sold ? As was done in the week 2 | ||||||||||
online lecture on ratio analysis , please assume sales of 1 dollar each year | ||||||||||
as you do your analysis . This problem follows the process shown in the | ||||||||||
Week 2 Ratio Analysis online lecture section titled : " Another Income | ||||||||||
Statement Analytical Approach : Percent of Sales " | ||||||||||
( 5 points ) | ||||||||||
2 . Overhead ( or Sales , General and Administrative Expense ) problem . | ||||||||||
1992 |
1993 |
1994 |
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Gross Profit Margin |
40 % |
39 % |
41 % |
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Operating Margin ( NOI / Sales ) |
15 % |
10 % |
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5 % |
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What is happening to S , G and A ( or overhead expenses )? Please set up | ||||||||||
an illustration assuming sales of 1.00 dollar each year just as you did in | ||||||||||
problem number one . | ||||||||||
( 5 points ) | ||||||||||
3 . Balance Sheet Problem | ||||||||||
1992 |
1993 |
1994 |
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Annual Sales Growth ( over prior yr ) |
+ 1 % |
0 % |
+ 1 % |
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Current Ratio |
3.5X |
2X |
1.2X |
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Average Collection Period |
25 days 30 days 55 |
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days | ||||||||||
What is happening to liquidity ? Why ? What are some follow-up questions | ||||||||||
your would ask ? ( 5 points ) |