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What are the strong and weak points on the ratios that I have listed below

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%

Jan 31 2020 View more View Less

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