Financial Ratios in Business Analysis

Financial Ratios in Business Analysis

Number one:

Soaring Eagles Corp. has total current assets
of $11,818,000, current liabilities of $5,280,000 and a quick ratio of 0.79.
What is its level of inventory?

Solution:

QR= CA – I / CI

0.79 = $ 11818,000 / $ 5280000

(0.79) $ 528000 = $11,818, 000 – I

I = $ 11, 818,000 –$ 4,171,200

=$7,646800

Number 2

Boulder Mountain Ski Company has total assets of $419,500,000 and a debt ratio of 0.29. Calculate the company’s debt-to-equity ratio. Round to two decimal places.

Solution:

DEBT RATIO = TOTAL LIABILITIES DEVIDED BY TOTAL ASSETS

0.29 = TL /$ 419, 500, 000.

TOTAL LIABILITIES = $419,…