(Solution) If Anyone In The Group Did Not Contribute, You May Report It To Me In Strict Confidence. Note: Use The Consolidated Financial Statements (income,... | Snapessays.com


(Solution) If anyone in the group did not contribute, you may report it to me in strict confidence. Note: Use the consolidated financial statements (income,...


Hey Guys,Can someone please help me with my practice exercise, Im really struggling with it. I just wanna know how its done, so I can go over the answers and study from it for my up coming exam next.I would be glad if someone can help me as soon as possible.Thank you very much If doing assignment as a group, BE SURE to do the raTos and analysis as a group together. If anyone in the group

 

did not contribute, you may report it to me in strict conFdence.

 

Note: Use the consolidated fnancial statements (income, balance sheet, cash Fow) and

 

ignore

 

“Statement o± Comprehensive Earnings.”

 

1. You work for a small Canadian auto and truck parts supplier. Your boss has asked you or your team to Fgure out

 

a number of Fnancial raTos (see table) for two larger Canadian companies in the auto parts manufacturing

 

industry – focussing on proFtability, operaTng e±ciency, Fnancial strength, returns on assets and returns to

 

shareholders.

 

Magna Intl.

 

2014 Year-end

 

Linamar

 

2014 Year-end

 

US Industry Average

 

December 2014

 

Gross Margin

 

18.25%

 

Net Margin

 

5.03%

 

Return on ²otal Assets

 

5.02%

 

Return on Equity

 

15.43%

 

Quick RaTo

 

0.21

 

Current RaTo¹

 

1.33

 

²otal LiabiliTes/Equity

 

2.08

 

Long ²erm Debt to Equity

 

0.68

 

²imes Interest* Earned

 

11.2X

 

Receivable ²urnover

 

6.4X

 

Inventory ²urnover

 

13.8X

 

*Interest Expense

 

may be called

 

‘³inance Expenses. Be sure to use

 

EBIT

 

.’

 


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This question was answered on: May 23, 2022

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