Test Yourself—Problems and Solutions
Q 1. Following are the financial statements of AB Ltd. for 2010.
From the aforementioned table, calculate the following:
- Current ratio
- Liquid ratio
- Receivables turnover ratio and collection period
- Inventory turnover and holding period
- Fixed assets turnover
- Total assets turnover
- Debt ratio
- D/E ratio
- Interest coverage ratio
- PAT margin
- ROA
- ROE
- EPS
- D/P ratio
- P/E ratio
- Book value per share
Solution:
1. Current Ratio
The current ratio is 2.2.
where:
Total current assets = $1,100
Total current liabilities = $500 ...
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