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Problem Set 1

The document provides financial ratios categorized into short term solvency ratios, asset utilization or turnover ratios, financial leverage ratios, and profitability ratios. It also includes the balance sheet and income statement for a company from 2010 to 2008. The balance sheet shows the company had total assets of $4,967 million in 2010 with current assets of $2,550 million and total liabilities of $2,690 million. The income statement indicates the company had net operating revenues of $5,418 million in 2010 and net income of $749 million.

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Eric Cauilan
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16 views

Problem Set 1

The document provides financial ratios categorized into short term solvency ratios, asset utilization or turnover ratios, financial leverage ratios, and profitability ratios. It also includes the balance sheet and income statement for a company from 2010 to 2008. The balance sheet shows the company had total assets of $4,967 million in 2010 with current assets of $2,550 million and total liabilities of $2,690 million. The income statement indicates the company had net operating revenues of $5,418 million in 2010 and net income of $749 million.

Uploaded by

Eric Cauilan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOC, PDF, TXT or read online on Scribd
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Short term solvency ratios

Current Ratio
Quick Ratio
Cash Ratio
Net Working Capital to Current Liabilities

Asset Utilization or Turnover ratios


Average Collection Period
Inventory Turnover Ratios
Receivable Turnover
Fixed Asset Turnover
Total Asset Turnover

Financial Leverage ratios

Total Debt Ratio (TD/TA)


Debt/Equity
Equity Ratio (TE/TA)
Long-term Debt Ratio (LTD/TA)
Times Interest Earned Ratio (EBIT/TI)

Profitability ratios

Gross Profit Margin


Net Profit Margin
ROA (NI/TA)
ROE (NI/TE)

Market value ratios


Price/Earnings Ratio

Balance Sheet 2010 2009 2008


Year Ending December 31,
(In millions except par value)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $896 $991 $186
Marketable securities $0 $0 0
Trade accounts receivable, less allowances $724 $615 609
0
Inventories $822 $631 815
Prepaid expenses and other assets $109 $110 91
TOTAL CURRENT ASSETS $2,550 $2,347 1,700
INVESTMENTS 0

TOTAL INVESTMENTS - 0 0

OTHER ASSETS - 0 0

PROPERTY, PLANT AND EQUIPMENT net 1,184 1,188 1,198

TRADEMARKS WITH INDEFINITE LIVES - 0 0

GOODWILL 766 791 782

OTHER INTANGIBLE ASSETS 468 445 471


TOTAL ASSETS $4,967 $4,770 $4,151
LIABILITIES AND SHAREOWNERS EQUITY
CURRENT LIABILITIES

Accounts payable and accrued expenses 369 $300 $350

Loans and notes payable - 0 0


0.3
Current maturities of long-term debt 4.00 0 391

Accrued income taxes 352 337 280

TOTAL CURRENT LIABILITIES 725 637 1,021

LONG-TERM DEBT 1,352 1,390 955

OTHER LIABILITIES 544 555 552

DEFERRED INCOME TAXES 70 57 38

TOTAL LIABILITIES 2,690 2,640 2,566


SHAREOWNERS EQUITY

Outstanding -64,035,811 shares at Dec 31, 2010, - 0 0


after deducting 22,161,083 treasury shares; 68,436,977
at Dec 31, 2009 after deducting 17,758,917 treasury shares

Capital surplus - 0 0

Reinvested earnings 1,517 1,322 906


Accumulated other comprehensive income ($138) (88) (147)
(loss) 0

TOTAL SHAREOWNERS EQUITY 2,194 2,061 1,524

Nocontrolling Interest 78 69 61
Total Equity 2,271 2,130 1,585
TOTAL LIABILITIES AND SHAREOWNERS EQUITY 4,967 $4,770 $4,151

Income Statement
Year Ended December 31, 2010 2009 2008
(In millions except per share data)
$
NET OPERATING REVENUES 5,418 $4,586 $5,028
3,62
Cost of goods sold 7 3,071 3,907
1,79
GROSS PROFIT 1 1,515 1,121
45
Selling, general and administrative expenses 2 435 418
Other operating charges 240.6 251 619
1,09
OPERATING INCOME 8 829 84
Interest expense - net 94 103 78
1,00
INCOME BEFORE INCOME TAXES 4 726 17
25
Income taxes 6 212 76
NET INCOME $749 $514 ($59)
BASIC NET INCOME PER SHARE $10.88 $7.36 ($0.97)
DILUTED NET INCOME PER SHARE $10.64 $7.26 ($0.97)
6
AVERAGE SHARES OUTSTANDING 4 68 67
Effect of dilutive securities 0 0 0
AVERAGE SHARES OUTSTANDING ASSUMING
DILUTION - 0 0

Ratios Formula
Solvency
Current Assets - Inventory/Current
Quick (acid test) Liabilities
Current Ratio Current Assets/Current Liabilities
Cash Ratio Cash/Current Liabilities
Net Working Capital to CL NWC/Current Liabilities
Asset Utilization or Turnover ratios
Average Collection Period Accounts Recievable/(Sales / 360)
Inventory Turnover Total Revenues/Inventory
Receivable Turnover Total Revenues/Accounts Receivable
Fixed Asset Turnover Total Revenues/Fixed Assets
Total Asset Turnover Total Revenues/Total Assets
Financial Leverage Ratios
Total Debt Ratio Total Debt/Total Assets
Debt-Equity Ratio Total Debt/Total Equity
Equity Ratio Total Equity/Total Assets
Long-term Debt Ratio (LTD/TA) Long-term Debt Ratio (LTD/TA)
Times Interest Earned EBIT/Total Interest Payments
Profitability
Gross Profit Margin (GPM) Gross Profits/Net Operating Income
Net Profit Margin (NPM) Net Profits/Net Operating Income
Return on Total Assets (ROA) Net Income/Total Assets
Return on Equity (ROE) Net Income/Total Equity
Earnings Per Share (EPS) Net Profit/Number of Shares Outstanding

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