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