1) LIQUIDITY RATIO: measures company's ability for paying its current liabilities from its current asset

Ratio Description Formula Company‘s Name Industry Average Analysis

Current Asset
Current ratio Current Liabilities   1,5 times  

Quick test (acid test ratio) Company's ability Total Current Asset−Inventory
for paying its
Current Liabilities
If there are component of current liabilities
assets: cash, account from its current ¿
asset   1,06 times  
receivables, inventory. Cash+ Account Receivable
Inventory might not be very Current Liabilities
liquid at all. We can exclude
inventory from our asset.

Ratio Description Formula Company‘s Name Industry Average Analysis

How many days it Account Receivable
takes the firm to Annual Credit Sales/365 days
Average Collection Period   75 days  
collect its
receivables
How many times Annual Credit Sales
Average Receivable account receivable Account Receivable   4,87 times/year  
Turnover Ratio are "rolled over"
during a year
How many times Cost of Good Sold
the inventory are Inventory
Inventory Turnover   5,78 times/year  
"rolled over" during
a year
2) EFFICIENT USE OF ASSETS RATIO: measures company's ability in utilizing assets to generate sales

Ratio Description Formula Company‘s Name Industry Average Analysis

Effectiveness of the Sales
company in
Total Asset Turnover Total Assets   1,09 times  
generating sales
from total assets
Effectiveness of the Sales
Assets ¿
company in Total ¿
Fixed Asset Turnover generating sales   1,05 times  
from total fixed
assets

3) PROFITABILITY RATIO: measures company's ability in generating income (return on its investment)

Ratio Description Formula Company‘s Name Industry Average Analysis

Operating Income( EBIT )

OROA=
Total Assets
¿
Effectiveness of the
company in Operating Profit Margin x Total Asset Turnover
Operating Income Return
generating   9,80%  
on Assets (OROA) Operating Income Sales
operating income x
from assets Sales Total Assets

Gross Profit Margin

Net Income Margin
Company's ability to
Net Income
Return on Equity give return to the   12%  
Common Equity
shareholder
4) LEVERAGE (FINANCING DECISION) / CAPITAL STRUCTURE RATIO: refer to the way a firm financing its assets using combination of debt and equity

Ratio Description Formula Company‘s Name Industry Average Analysis

Percentage of the Total Debt (Total Liabilities)
Debt Ratio firm's assets using Total Assets   58%  
its debt
Company's ability to Operating Income
Time Interest earned Ratio pay intereston the Interest   3,93 times  
debt