How net profit will calculate
EBIT - interest - preferred dividend - dividend declared
or
dividends will not be less
Regards
n Sun, Nov 6, 2011 at 12:01 AM, Marina Khan <damsel.khan@googlemail.com> wrote:
(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
?
?
because1. benchmark of Quick ratio is 1:1 n above then this consider as good2.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 =)--
Marina Khan
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