Assignment 3: Ratio Analysis
Module 1 Worksheet
1. Calculate the following ratios AND intepret the result against the industry average:
| Ratio | Your Answer | Industry Average | Your Interpretation (Good-Fair-Low-Poor) |
| Profit margin on sales | 3% | ||
| Return on assets | 9% | ||
| Receivable turnover | 16X | ||
| Inventory turnover | 10X | ||
| Fixed asset turnover | 2X | ||
| Total asset turnover | 3X | ||
| Current ratio | 2X | ||
| Quick ratio | 1.5X | ||
| Times interest earned |
| 7X |
2. Analysis:
Give your interpretation of what this shows and how the business can use this information to improve it’s performance:
