Using the Exhibit A document, compute the following ratio, compare it to the industry average, and comment. Compute the current ratio . Compute the…

Using the Exhibit A document, compute the following ratio, compare it to the industry average, and comment.

Compute the current ratio.

Compute the quick ratio.

Compute days in inventory.

Compute days outstanding in accounts receivable.

Compute the gross margin.

Compute the net income percentage.

Compute the long term debt to equity ratio.

Compute the interest coverage.

Compute the ROA

Compute the ROE.

Compute the ROE using the DuPont Model.

Exhibit A

James Trading Corporation

Balance Sheet

December 31, 20XX



Liabilities and Equity




Accounts receivable


 Accounts payable




 Long term debt


Total current assets


 Total liabilities


Net Plant and equipment


 Common Stock


Other assets


 Retained earnings


 Total equity


Total Assets


 Total Liabilities and Equity


James Trading Corporation

Income Statement

December 31, 20XX

Income Statement




 Cost of goods sold


 Gross margin


 Operating expenses




 Operating income


 Interest expense


 Earnings before taxes


 Income taxes


 Net income


Industry Average Ratios



 Current ratio


 Quick ratio


 Days in inventory


 Days in accounts receivable


 Gross margin


 Net margin


 Long term debt to equity ratio


 Interest coverage






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