1. CH4- In class exercise

3. Q. 1,2 Industry Averages 2012 2013 Analysis Current ratio 2 1.84 0.90
Acid-test ratio
0.8
0.78
0.24
Average collection period
37 days
30.42
18.98
Inventory turnover
2.5
3.10
4.06
Debt ratio
58%
50%
61%
Times interest earned
3.8
3.15
4.67
Operating profit margin
10%
9.6%
10.6%
Total asset turnover
1.14
1.33
2.05
Fixed asset turnover
0.01
2.42
3.50
Operating return on assets
11.40%
13%
22%
Return on equity
9.50%
8.73%
22.13%

4. 3. Dupont Analysis ROE =NPMx TATOx Equity Multiplier Remark:
NPM = Net income/ Sales
TATO = Sales/ TA
EM = (1/1-Debt ratio)
Debt ratio =Total debt/Total Assets
Year
ROE
NPM
TATO EM
2012
8.73%
3.28%
1.33
2.00
2013
22.13%%
4.18%
2.05
2.58

5. 4. Market Value Ratios
EPS = Net Income / # of Common share outstanding's
P/E = Market Price per Share/EPS
Market to Book = Market Price per share/ Book Value per share
Remark:
Book value per share = Common equity/
# of Common share outstanding's
2013
EPS
3.34
P/E
4.49
Market to
Book Ratio
0.99
BV per share