University Of Cincinnati Operations And Supply Chain Management Assignment Help - Comprehensive Ratio Analysis

Question - The Jimenez Corporation's forecasted 2011 financial statements follow, along with some industry
average ratios.
Jimenez Corporation: Forecasted Balance Sheet as of December 31, 2011
Assets
Cash $72,000
Accounts receivable 439,000
Inventories 894,000
Total current assets $1,405,000
Fixed assets 431,000
Total assets $1,836,000
Liabilities and Equity
Accounts and notes payable $432,000
Accruals 170,000
Total current liabilities $602,000
Long-term debt 404,290
Common stock 575,000
Retained earnings 254,710
Total liabilities and equity $1,836,000
Jimenez Corporation: Forecasted Income Statement for 2011
Sales $4,290,000
Cost of goods sold 3,580,000
Selling, general, and administrative expenses 370,320
Depreciation 159,000 ...Read More
Earnings before taxes (EBT) $180,680
Taxes (40%) 72,272
Net income $108,408
Per-Share Data
EPS $4.71
Cash dividends per share $0.95
P/E ratio 5

Market price (average) $23.57
Number of shares outstanding 23,000
Industry Financial Ratio (2010)*
Quick ratio 1.0
Current ratio 2.7
Inventory turnover** 7.0
Days sales outstanding*** 32 days
Fixed assets turn over** 13.0
Total assets turnover** 2.6
Return on assets 9.1%
Return on equity 18.2%
debt to asset ratio 50.0%
Profit margin on sales 3.5%
P/E ratio
Liability to assets ratio
6.0
50%
P/cash flow ratio 3.5
*Industry average ratios have been constant for the past 4 years.
**Based on year-end balance sheet figures.
***Calculation is based on a 365-day year.
Calculate Jimenez's 2011 forecasted ratios, compare them with the industry average data, and
comment briefly on Jimenez's projected strengths and weaknesses. Round DSO to the nearest
whole. Round the other ratios to one decimal place.
Ratios Firm Industry Comment
Quick ratio ________ 1.0 _________________
Current ratio ________ 2.7 _________________
Inventory turnover ________ 7.0 _________________
Days sales outstanding ________ days 32 days _________________
Fixed assets turnover ________ 13.0 _________________
Total assets turnover ________ 2.6 _________________
Return on assets ________ % 9.1% _________________
Return on equity ________ % 18.2% _________________

Debt to asset ratio
liability to asset ratio ________ % 21.0%
50.0%
________________
_
Profit margin on sales ________ % 3.5% _________________
EPS $4.71 n.a. --
Stock Price $23.57 n.a. --
P/E ratio ________ 6.0 _________________
P/CF ratio ________ 3.5 _________________
M/B ratio 0.65 n.a. --
So, the firm appears to be _________________ managed. ...Read Less

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