FIN 571 TUTOR Motivated Minds/fin571tutor.com FIN 571 TUTOR Motivated Minds/fin571tutor.com | Page 51

1992		1993			1994
Gross Profit Margin	40 %		39 %			41 %
Operating Margin( NOI / Sales)	15 %		10 %
5 %
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
Annual Sales Growth( over prior yr)	+ 1 %		0 %		+ 1 %
Current Ratio	3.5X		2X		1.2X
Average Collection Period	25 days 30 days 55
days
What is happening to liquidity? Why? What are some follow-up questions
your would ask?( 5 points)
4. Using the data provided below, which is the better managed company?
Why? Please support your answers by calculating appropriate ratios.( 5
points)

Company A Company B

Sales	10 million dollars	20 million dollars
Net Income	1 million dollars	2 million dollars
Total Assets	10 million dollars	15 million dollars
Click the Assignment Files tab to submit your assignment.
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FIN 571 Week 2 Learning Team Reflection

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