(fin630) Oh God very easy Assignment you got......let me solve
Question #01. You are required to calculate the following:
Quick Ratio = Current assets - inventories / current liabilities
= 937 - 212 / 409
=1.77 times
Net profit Margin = Profit after Tax / Net Sales x 100
= 50,150 / 105,000*100
= 47.7 = 48 %
Times Interest Earned (Interest Coverage Ratio) = BIT / Interest Expense
= 50,150 / 2,550
= 19.6 times
| Ratios
| Industry average
| Company's ratio Ranking | (poor/good or low/high) |
| Quick | 1.75 Times | 1.77 times | good |
| Net Profit Margin | 35% | 48% | good |
| Interest coverage | 16 Times | 19 times | good |
| Earning per share | Rs. 1.35 | ? | ? |
because
1. benchmark of Quick ratio is 1:1 n above then this consider as good
2.Interest coverage : Increasing Ratio is favorable because it may attract the investors.
3. Net profit margin if increase good for the comapny n decrease not favorable
Only 1 ratio left .......dont worry i'll solve it tomorrow.....if u find any mistake let me inform =)
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