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What are the strong and weak points on the ratios that I have listed below. This is a company's performance for the last three years and I need to understand how the company is doing for the last three years. What year is better and why. What year is the weakest and why. I need this answer ASAP! Thank you!
Current Ratio
Current assets/Current liabilities
2017: $250,000/$142,000= 1.76 times
2016: $200,000/$100,000= 2 times
2015: $152,000/$93,000= 1.63 times
Quick Ratio
Cash & Marketable securities + Accounts receivable/Current liabilities
2017: $25,000+$100,000/$142,000= 0.88 times
2016: $20,000+$80,000/$100,000= 1 times
2015: $16,000+$56,000/$93,000= 0.77 times
Average Payment Period
Accounts payable/(cost of goods sold/365)
2017: $78,000/($450,000/365)= 63.27 days
2016: $65,000/($375,000/365)= 63.27 days
2015: $58,000/($338,000/365)= 62.63 days
Total Assets Turnover
Net sales/Total assets
2017: $700,000/$500,000= 1.4 times
2016: $600,000/$400,000= 1.5 times
2015: $540,000/$352,000= 1.53 times
Fixed Assets Turnover
Net sales/Net fixed assets
2017: $700,000/$250,000= 2.8 times
2016: $600,000/$200,000= 3 times
2015: $540,000/$200,000= 2.7 times
Average Collection Period
Accounts receivable/(Net sales/365)
2017: $100,000/($700,000/365)= 52.14 days
2016: $80,000/($600,000/365)= 48.67 days
2015: $56,000/($540,000/365)= 37.85 days
Inventory Turnover
Cost of goods sold/Inventory
2017: $450,000/$125,000= 3.6 times
2016: $375,000/$100,000= 3.75 times
2015: $338,000/$80,000= 4.23 times
Total Debt to Total Assets
Total debt/Total assets
2017: $282,000/$500,000= 56%
2016: $200,000/$400,000= 50%
2015: $164,000/$352,000= 47%
Equity Multiplier
Total assets/Total equity
2017: $500,000/$282,000= 1.77
2016: $400,000/$200,000= 2
2015: $352,000/$164,000= 2.15
Interest Coverage
Earnings before interest & taxes/Interest expense
2017: $74,000/$14,000= 5.29
2016: $60,000/$10,000= 6
2015: $47,000/$7,000= 6.71
Fixed Charge Coverage
Income before taxes/Interest
2017: $60,000/$14,000= 4.29
2016: $50,000/$10,000= 5
2015: $40,000/$7,000= 5.71
Operating Profit Margin
Earnings before interest & taxes/Net sales
2017: $74,000/$700,000= 10.57%
2016: $60,000/$600,000= 10%
2015: $47,000/$540,000= 8.70%
Net Profit Margin
Net income/Net sales
2017: $36,000/$700,000= 5.14%
2016: $30,000/$600,000= 5%
2015: $24,000/$540,000= 4.44%
Operating Return on Assets
Earnings before interest & taxes/Total assets
2017: $74,000/$500,000= 1.9%
2016: $60,000/$400,000= 1.5%
2015: $47,000/$352,000= 1.3%
Return on Total Assets
Net income/Total assets
2017: $36,000/$500,000= 7.2%
2016: $30,000/$400,000= 7.5%
2015: $24,000/$352,000= 6.8%
Return on Equity
Net income/Common income
2017: $36,000/$218,000= 16.5%
2016: $30,000/$200,000= 15%
2015: $24,000/$188,000= 12.8%
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