Assignment # 7 Example | Topics and Well Written Essays - 500 words - 1

7 - Assignment Exampleb) The amount of lucre generated by the company per dollar of sales Net profit margin. It is profitability ratio. A company should piddle higher(prenominal) value for the ratio because it indicates high profitability.c) This ratio gives a measure of the number of days it takes a company to collect on sales that it sells on credit Days sales outstanding. Efficiency/ plus Utilization ratio. A number oneer value for the ratio is favourable as a company collects immediate payment faster from customers, it has good collection procedures.d) This ratio is used to determine how easily a company lot pay interest expenses on outstanding debt Times interest earned. It is a leverage ratio. A higher value for the ratio is favourable the company has more cover for finance costs and then low business risk.e) This ratio specifies the number of days it takes for the companys inventory to be converted to sales, each as cash or accounts receivable Days in inventory. Effici ency/Asset Utilization ratio. A lower value for the ratio is more favourable as the company is converting its inventories into cash faster hence the inventory is more liquid.f) This ratio indicates how profitable a company is over on accounting consummation (typically 12 months) without regard to how it is financed Return on assets. Profitability ratio. A higher value for the ratio is requisite because it indicates that the company is more profitable.g) A ratio that further refines the liquidity by measuring the amount of the near liquid current assets there are to cover current liabilities Acid test ratio. It is a liquidity ratio. A company should have higher value for the ratio to be able to meet its suddenly term obligations with lots of ease.h) This ratio compares the amount of interest-bearing debt in a companys working capital structure to its total assets Debt-to-total asset ratio (leverage ratio). A lower value for the ratio is required because it indicates slight leve rage and less risk.i) This ratio is a measure of