Comprehensive Ratio Analysis The Jimenez Corporation\'s forecasted 2017 financia
ID: 2815020 • Letter: C
Question
Comprehensive Ratio Analysis The Jimenez Corporation's forecasted 2017 financial statements follow, along with some industry average ratios. Jimenez Corporation: Forecasted Balance Sheet as of December 31, 2017 Assets Cash Accounts receivable Inventories $ 72,000 439,000 894,000 $1,405,000 431,000 $1,836,000 Total current assets Fixed assets Total assets Liabilities and Equity Accounts payable Notes payable Accruals Total current liabilities Long-term debt Common stock Retained earnings Total liabilities and equity $ 332,000 100,000 170,000 $ 602,000 404,290 575,000 254,710 $1,836,000 Jimenez Corporation: Forecasted Income Statement for 2017 Sales Cost of goods sold (excluding depreciation) Selling, general, and administrative expenses Depreciation $4,290,000 3,580,000 370,320 159,000 $ 180,680 72,272 $ 108,408 Earnings before taxes (EBT) Taxes (40%) Net income Jimenez Corporation: Per Share Data for 2017 EPS Cash dividends per share P/E ratio Market price (average) Number of shares outstanding 4.71 0.95 5.0 $23.57 23,000Explanation / Answer
cmpany
Industry
quick ratio
quick assets/current liabilities
511000/602000
0.8
comment
Poor
quick assets
1405000-894000
511000
current liabilities
602000
current ratio
current assets/current liabilities
1405000/602000
2.3
2.7
Poor
current assets
1405000
1405000
current liabilities
602000
Inventory turnover
cost of goods sold/inventory
3580000/894000
4.0
7
Poor
days sales outstanding
365/accounts receivable turnover ratio
365/9.77
37
32
Poor
accounts receivable turnover ratio = sales/accounts receivables
4290000/439000
9.77
Fixed asset turnover ratio = sales /total of fixed assets
4290000/431000
4290000/431000
10.0
13
Poor
total asset turnover ratio = sales/total assets
4290000/1836000
2.336601
2.3
2.6
Poor
return on assets
net income/total assets
108408/4290000
2.5%
9.10%
Poor
return on equity
net income/total equity
108408/(575000+254710)
13.1%
18.20%
Poor
profit margin on sales
net income/sales
108408/4290000
2.5%
3.50%
Poor
liabilities to asset ratio
total of liabilities/total assets
(602000+404290)/1836000
54.8%
51.00%
Poor
debt to asset ratio
total of debt/total assets
(404290)/1836000
22.0%
21%
Poor
PE ratio
market price/eps
23.57/4.71
5.00
6.00%
Poor
market to book value ratio
market value/book value
23.57 / (829710/23000)
0.7
3.5
Poor
So firm appers to be poorly managed in comparison to industry average
cmpany
Industry
quick ratio
quick assets/current liabilities
511000/602000
0.8
comment
Poor
quick assets
1405000-894000
511000
current liabilities
602000
current ratio
current assets/current liabilities
1405000/602000
2.3
2.7
Poor
current assets
1405000
1405000
current liabilities
602000
Inventory turnover
cost of goods sold/inventory
3580000/894000
4.0
7
Poor
days sales outstanding
365/accounts receivable turnover ratio
365/9.77
37
32
Poor
accounts receivable turnover ratio = sales/accounts receivables
4290000/439000
9.77
Fixed asset turnover ratio = sales /total of fixed assets
4290000/431000
4290000/431000
10.0
13
Poor
total asset turnover ratio = sales/total assets
4290000/1836000
2.336601
2.3
2.6
Poor
return on assets
net income/total assets
108408/4290000
2.5%
9.10%
Poor
return on equity
net income/total equity
108408/(575000+254710)
13.1%
18.20%
Poor
profit margin on sales
net income/sales
108408/4290000
2.5%
3.50%
Poor
liabilities to asset ratio
total of liabilities/total assets
(602000+404290)/1836000
54.8%
51.00%
Poor
debt to asset ratio
total of debt/total assets
(404290)/1836000
22.0%
21%
Poor
PE ratio
market price/eps
23.57/4.71
5.00
6.00%
Poor
market to book value ratio
market value/book value
23.57 / (829710/23000)
0.7
3.5
Poor
So firm appers to be poorly managed in comparison to industry average
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