solution

Ratio analysis

The following financial statements apply to Bassie Company.

Required

Calculate the following ratios for 2011 and 2012. When data limitations prohibit computing averages, use year-end balances in your calculations.

a. Net margin

b. Return on investment

c. Return on equity

d. Earnings per share

e. Price-earnings ratio (market prices at the end of 2011 and 2012 were $5.94 and $4.77, respectively)

f. Book value per share of common stock

g. Times interest earned

h. Working capital

i. Current ratio

j. Quick (acid-test) ratio

k. Accounts receivable turnover

l. Inventory turnover

m. Debt to equity ratio

n. Debt to assets ratio

 
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