Fill in the missing ratios for DelCo. based on their 2019 financial statements (end of the exam). There are 11 ratios to calculate - each one is worth 3 points. Use the Industry Averages and the ratios you find to answer questions 12 and 13. Ratio DelCo. Industry Average
1) Current Ratio 1.92 2.0
2) Quick Ratio 0.92 1.4
3) Inventory Turnover 3.57 7.5
4) Days Sales Outstanding 44 days 45
5) Fixed Assets Turnover 2.00 2.1
6) Total Assets Turnover 1.16 1.3
7) Debt Ratio 45.68% 51%
8) Times-Interest Earned Ratio 2.31 7.5
9) Profit Margin 9.32% 9.2%
10) Return on Assets 10.77% 11.0%
11) Return on Equity 19.82% 17%
Use Delco. Financial Statements for Questions
DelCo.: Balance Sheet as of 12/31/19 (thousands of dollars)
Assets Liabilities and equity
Cash and cash equivalents $24,000 Accounts payable $35,000
Accounts Receivable 52,500 Notes payable 13,500
Inventories 84,000 Other current liabilities 35,000
Total current assets $160,500 Total current liabilities $83,500
Net fixed assets 220,400 Long-term debt 90,500
Common equity 206,900
Total assets $380,900 Total liabilities and
equity $380,900
DelCo.: Income Statement for Year Ended 12/31/19 (thousands of dollars)
Sales $440,000
Cost of goods sold 300,000
Selling, general, and administrative expenses 19,660
EBIT $120,340
Interest Expense 52,000
EBT $68,340
Taxes (40%) 27,336
Net Income $41.004
1. How is DelCo. doing in terms of debt management and profitability when compared to the industry? Compare all ratios and percentages relevant to debt management and profitability.
2. How is Del. Co. doing in terms of liquidity and asset management when compared to the industry? Compare all ratios and percentages relevant to liquidity and asset management.