Ratio Analysis | Credit Operation And Management Math solution | AIBB |

Ratio Analysis | Credit Operation Math solution | Financial Analysis | AIBB | Banking Diploma | Credit Operation and Management Math Solution | Credit Operation problem Solution | #ratio #financial

Solution i) Current Ratio = Current Asset/Current Liability
Current Ratio = ( Cash + Account Receivable + Inventory)/ Account Payable = ( 5300 + 21200 + 9000) / 10370 = 3.42337

Solution ii) Quick Ratio = (Current Assets - Inventory)/ Current Liability = (Current Assets - Inventory) Current Liabilities
Quick Ratio = {(5300+21200+9000) -9000} /10370 = (35500-9000)/10370 = 26500/10370 = 2.555448

Solution iii) Account Receivable Turnover = Net Credit Sales/Average Net Account Receivable.
Account Receivable Turnover = {120000/(21200+23400)/2} = 120000/22300 = 5.3881166

Solution iV) Inventory Turnover = (Cost of Goods Sold / Average inventory) = 70000 /{(9000 + 7000)/2} = 70000/(16000/2) = 70000/8000 = 8.75

Solution V) Asset Turnover = Net Sales / Average Total Assets = 120000/{(125500 +130100)/2} = 120000/(255600 / 2) =120000/127800 = 0.938967

Solution Vi) Profit Margin = Net Income / Net sales = 14000/120000 = 0.11666 = 11.66 %

Solution Vii) Return on Equity(ROE) = Net income / Average Stockholders Equity = 14000/{(75000 + 69000)/2} = 14000/(144000/2) = 14000/72000 = 0.1944 = 19.44%

Solution Viii) Return on Asset( ROA) = Net Income / Average Total Assets = 14000/{(125500+130100)/2} = 14000/(155600/2) = 14000/127800 = 0.1095 = 10.95%

Solution ix) Debt to Asset: Total Current Liabilities/ Total Assets = 10370 / 125500 = 0.082629 = 8.826%