Question)
Part A: From the accompanying
Balance Sheet and Income Statement for Jackson Corporation, prepare the
following ratio calculations and discuss the results. Provide your interpretation of each
ratio. Be sure to show all your work and
details.
Profitability Ratios
Profit margin
Return on Assets
Return on Equity
Asset Utilization Ratios
Receivables turnover
Average collection period
Inventory turnover
Fixed asset turnover
Total asset turnover
Liquidity Ratios
Current ratio
Quic ratio
Debt Utilization Ratios
Debt to total assets
Times interest earned
Fixed charge coverage
Part B:
What is the purpose of ratio analysis?
What are the limitations?
