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Company Ratio Analysis and Comparison
Company Ratio Analysis and Comparison
Use the following Industry Ratios to evaluate your company’s financial position:
Liquidity and Efficiency Ratios
Current ratio $1.75 to $1
Acid-test (Quick) ratio $0.95 to $1
Accounts receivable turnover 10 times
Days’ sales uncollected 29 days
Inventory turnover 7 times
Days’ sales in inventory 52 days
Total asset turnover 5 times
Solvency Ratios
Debt ratio $0.65 to $1
Equity ratio $0.35 to $1
Debt-to-equity ratio $1.86 to $1
Times interest earned 5 times
Profitability Ratios
Profit margin ratio 12%
Gross margin ratio 45%
Return on total assets 12%
Return on common
stockholders’ equity 24%
Book value per common share $40
Basic earnings per share $3.25
Market Prospects
Price-earnings 10 times
Dividend yield 5%
Grading Rubric for Company Ratio Analysis and Comparison
Your quiz will be graded based on the following rubric:
| Category | Unacceptable (0-1) | Needs Improvement (2-3) | Good (4) | Excellent (5) | Total Possible Points |
| Organization (x3) | There is no apparent organization to the answers. They shows some coherence but ideas lack unity. | There is some level of organization though digressions, ambiguities, irrelevance are too many. Transition evident but not used throughout the paper. | Answers are coherent and logically organized with transitions used between ideas and paragraphs to create coherence. Overall unity of ideas is present. | Answers show high degree of attention to logic and reasoning of points. Unity clearly leads the reader to the conclusion and stirs thought regarding the topic. | 15 |
| Content (x3) | Answers lack evidence of critical thinking. Writer uses superficial, simplistic, or irrelevant reasons and unjustifiable claims. Makes illogical, inconsistent inference. | Answers are primarily opinion without valid support. Little critical thinking is evident. Follows existing evidence to obtain conclusions. | Ideas are logical and reasoned, but demonstrate lesser degree of originality. Follows evidence and reason lead to obtain justifiable, logical conclusion. | Writer develops logical and reasoned independent ideas that go beyond predictable outcomes or the conclusions of researched materials. Follows where evidence and reason lead in order to obtain defensible, thoughtful, logical conclusions or solutions. | 15 |
| Grammar & Mechanics(x2) | Sentences are unclear and many grammatical errors in structure make answers virtually unreadable. Spelling, punctuation, capitalization, and vocabulary usage contain major flaws that impede readability. | Most spelling, punctuation, and grammar correct allowing reader to progress through the answers. Some errors remain. | Answers have few spelling, punctuation, and grammatical errors allowing reader to follow ideas clearly. Very few fragments or run-ons. | Answers are free of distracting spelling, punctuation, and grammatical errors; absent of fragments, comma splices, and run-ons. | 5 |
Company Ratio Analysis and Comparison
