trotman5e练习题ch15第15章财务报表分析.pdfVIP

Chapter 15 Financial statement ysis Practice Problems Practice Problem A 1a Profitability: ROE has reased from 12 per cent to 13 per cent while the return on assets has fallen from 9 per cent to 8 per cent. As shown in part 3 the fall in ROA is due to the fall in asset turnover. b Asset management : the average time to collect debtors has stayed constant. However, the days in inventory has reased from 55 days to 72 days, meaning that, o age, it is taking much longer to sell inventory. These extra days need to be financed by the . The reasons for the build up in inventory should be investigated (e.g. stocking up for some large orders, as opposed to lack of demand, for the product, require very different actions). c Liquidity: the current ratio has reased (mainly due to the build up in inventory, see above) while the quick ratio has dropped below 1 to 0.7 indicating the may have problems paying their bills in the short term. d Financial structure: the level of gearing has reased substantially from 1 to 1.4. The ability of the to pay its interest bill needs to be considered, particularly given the decrease in profitability as indicated by the lower ROA. It would be useful to calculate the interest cover ratio. 2 While ROA has decreased, ROE has reased because of the rease in gearing. Provided the extra funds borrowed earn a return higher than the cost of the debt, shareholders will benefit and the ROE will rease. 3 You can see from the numbers that ROA = Profit Margin ·Asset Turnover (e.g. 20 x 0.4 per cent = 8 per cent for 2012). While the profit