1. Liquidity Ra o (Current Ra o)
Formula:
Problems:
1. A company has current assets of $500,000 and current liabili es of $250,000. Find the current
ra o.
2. ABC Ltd. has current liabili es of $180,000 and current assets of $450,000. Calculate the current
ra o.
3. XYZ Corp reports current assets of $300,000 and current liabili es of $150,000. Compute the
liquidity ra o.
4. A firm has current liabili es of $120,000 and a current ra o of 2.5. Find its current assets.
5. If a company’s current ra o is 1.8 and current liabili es are $200,000, what are its current
assets?
Answers:
1. 500,000/250,000=2.0
2. 450,000/180,000=2.5
3. 300,000150,000=2.0
4. 2.5×120,000=300,000
5. 1.8×200,000=360,000
2. Quick Ra o (Acid-Test Ra o)
Formula:
Problems:
1. A company has current assets of $400,000, inventory of $100,000, and current liabili es of
$150,000. Find the quick ra o.
2. XYZ Ltd. reports current assets of $600,000, inventory of $200,000, and current liabili es of
$250,000. Calculate the quick ra o.
3. ABC Corp has a quick ra o of 1.5 and current liabili es of $200,000. If its inventory is $50,000,
determine its current assets.
4. A business has a quick ra o of 2.2 and current liabili es of $300,000. If its current assets are
$700,000, find the inventory value.
5. If a firm's quick ra o is 1.8 and its inventory is $80,000, while its current assets are $480,000,
calculate the current liabili es.
3. Inventory Turnover Ra o
Formula:
Problems:
1. A company has COGS of $500,000 and average inventory of $100,000. Find the inventory
turnover ra o.
2. XYZ Ltd. reports inventory turnover of 4. If its average inventory is $250,000, find COGS.
3. A firm’s inventory turnover ra o is 6, and its COGS is $1,200,000. Calculate the average
inventory.
4. ABC Corp has average inventory of $300,000 and COGS of $900,000. Compute the inventory
turnover ra o.
5. If a company’s inventory turnover ra o is 8 and its COGS is $640,000, what is its average
inventory?
4. Average Collec on Period
Problems:
1. A company has accounts receivable of $50,000 and net credit sales of $500,000. Find the
average collec on period.
2. XYZ Ltd. has an average collec on period of 45 days and net credit sales of $900,000. Calculate
the accounts receivable.
3. A firm has accounts receivable of $60,000 and an average collec on period of 30 days. Compute
net credit sales.
4. ABC Corp has net credit sales of $1,200,000 and an average collec on period of 40 days. Find
accounts receivable.
5. If a company’s accounts receivable is $75,000 and the average collec on period is 50 days,
determine net credit sales.
5. Average Payment Period
Problems:
1. A company has accounts payable of $40,000 and purchases of $480,000. Find the average
payment period.
2. XYZ Ltd. has an average payment period of 50 days and purchases of $600,000. Calculate
accounts payable.
3. A firm has accounts payable of $90,000 and an average payment period of 60 days. Compute
purchases.
4. ABC Corp has purchases of $1,000,000 and an average payment period of 45 days. Find accounts
payable.
5. If a company’s accounts payable is $120,000 and the average payment period is 70 days,
determine purchases.
1.
6. Total Asset Turnover
Problems:
1. A company has net sales of $800,000 and total assets of $400,000. Find the total asset turnover
ra o.
2. XYZ Ltd. has total assets of $500,000 and a total asset turnover of 1.8. Calculate net sales.
3. A firm has a total asset turnover of 2.5 and net sales of $2,000,000. Compute total assets.
4. ABC Corp has net sales of $1,500,000 and total asset turnover of 1.2. Find total assets.
5. If a company’s total assets are $700,000 and its total asset turnover is 1.6, determine net sales.
7. Debt Ra o
Formula:
1. A company has total debt of $300,000 and total assets of $600,000. Find the debt ra o.
2. XYZ Ltd. has a debt ra o of 0.4 and total assets of $800,000. Calculate total debt.
3. A firm has total debt of $500,000 and a debt ra o of 0.5. Compute total assets.
4. ABC Corp has total assets of $1,200,000 and total debt of $360,000. Compute the debt ra o.
5. If a company's debt ra o is 0.65 and total assets are $900,000, determine total debt.
8. Debt-to-Equity Ra o
Problems:
1. A company has total debt of $400,000 and total equity of $600,000. Find the debt-to-equity
ra o.
2. XYZ Ltd. has a debt-to-equity ra o of 1.5 and total equity of $500,000. Calculate total debt.
3. A firm has total debt of $900,000 and a debt-to-equity ra o of 0.75. Compute total equity.
4. ABC Corp has total equity of $1,000,000 and a debt-to-equity ra o of 2.2. Find total debt.
5. If a company’s total debt is $450,000 and its debt-to-equity ra o is 0.9, determine total equity.
9. Times Interest Earned Ra o
Problems:
1. A company has EBIT of $150,000 and interest expense of $30,000. Find the mes interest earned
ra o.
2. XYZ Ltd. has a mes interest earned ra o of 4 and an interest expense of $40,000. Calculate EBIT.
3. A firm has EBIT of $500,000 and a mes interest earned ra o of 6. Compute interest expense.
4. ABC Corp has interest expense of $25,000 and EBIT of $200,000. Find the mes interest earned
ra o.
5. If a company's mes interest earned ra o is 3.5 and its interest expense is $60,000, determine
EBIT.
1.
3.5=EBIT60,000⇒EBIT=210,0003.5=60,000EBIT⇒EBIT=210,000
10. Gross Profit Margin
Problems:
1. A company has gross profit of $300,000 and net sales of $600,000. Find the gross profit margin.
2. XYZ Ltd. has a gross profit margin of 40% and net sales of $500,000. Calculate gross profit.
3. A firm has a gross profit of $120,000 and a gross profit margin of 25%. Compute net sales.
4. ABC Corp has net sales of $1,000,000 and a gross profit margin of 30%. Find gross profit.
5. If a company's gross profit is $250,000 and its net sales are $700,000, determine the gross profit
margin.
11. Opera ng Profit Margin
Problems:
1. A company has EBIT of $200,000 and net sales of $800,000. Find the opera ng profit margin.
2. XYZ Ltd. has an opera ng profit margin of 15% and net sales of $600,000. Calculate EBIT.
3. A firm has EBIT of $180,000 and an opera ng profit margin of 20%. Compute net sales.
4. ABC Corp has net sales of $1,500,000 and an opera ng profit margin of 12%. Find EBIT.
5. If a company’s EBIT is $90,000 and its net sales are $900,000, determine the opera ng profit
margin.
12. Net Profit Margin
Problems:
1. A company has a net profit of $100,000 and net sales of $500,000. Find the net profit margin.
2. XYZ Ltd. has a net profit margin of 18% and net sales of $400,000. Calculate net profit.
3. A firm has a net profit of $90,000 and a net profit margin of 12%. Compute net sales.
4. ABC Corp has net sales of $2,000,000 and a net profit margin of 5%. Find net profit.
5. If a company’s net profit is $250,000 and its net sales are $1,250,000, determine the net profit
margin.
13. Earnings Per Share (EPS)
Problems:
1. A company has a net profit of $500,000, no preferred dividends, and 100,000 outstanding
shares. Find EPS.
2. XYZ Ltd. has a net profit of $750,000, preferred dividends of $50,000, and 150,000 shares.
Calculate EPS.
3. A firm has EPS of $5, net profit of $1,000,000, and preferred dividends of $200,000. Compute
outstanding shares.
4. ABC Corp has 200,000 shares, a net profit of $900,000, and no preferred dividends. Find EPS.
5. If a company has EPS of $2.50, net profit of $600,000, and preferred dividends of $100,000,
determine outstanding shares.
14. Return on Total Assets (ROA)
Problems:
1. A company has net profit of $400,000 and total assets of $2,000,000. Find ROA.
2. XYZ Ltd. has an ROA of 10% and total assets of $3,500,000. Calculate net profit.
3. A firm has net profit of $250,000 and ROA of 8%. Compute total assets.
4. ABC Corp has total assets of $4,000,000 and an ROA of 12%. Find net profit.
5. If a company’s net profit is $500,000 and its total assets are $6,250,000, determine ROA.
15. Fixed Payment Coverage Ra o
Problems:
1. A company has EBIT of $500,000, fixed charges of $50,000, and interest of $100,000. Find the
fixed payment coverage ra o.
2. XYZ Ltd. has a fixed payment coverage ra o of 4, EBIT of $800,000, and interest of $200,000.
Calculate fixed charges.
3. A firm has EBIT of $600,000, fixed charges of $75,000, and a coverage ra o of 3. Compute
interest.
4. ABC Corp has interest of $150,000, fixed charges of $90,000, and a coverage ra o of 5. Find EBIT.
5. If a company’s fixed payment coverage ra o is 2.5, EBIT is $700,000, and fixed charges are
$100,000, determine interest.
That concludes all the financial ra os you requested. Let me know if you need further explana ons or
varia ons of the problems!
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There are s ll some ra os remaining,,go for them
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Here are prac ce problems and solu ons for the remaining financial ra os.
16. Return on Equity (ROE)
Problems:
1. A company has a net profit of $500,000 and total equity of $2,500,000. Find ROE.
2. XYZ Ltd. has an ROE of 15% and total equity of $4,000,000. Calculate net profit.
3. A firm has net profit of $350,000 and an ROE of 10%. Compute total equity.
4. ABC Corp has total equity of $6,000,000 and an ROE of 8%. Find net profit.
5. If a company’s net profit is $900,000 and its total equity is $9,000,000, determine ROE.
17. Book Value Per
Share (BVPS)
Problems:
1. A company has total equity of $5,000,000, no preferred equity, and 1,000,000 outstanding
shares. Find BVPS.
2. XYZ Ltd. has total equity of $7,500,000, preferred equity of $1,000,000, and 1,500,000 shares.
Calculate BVPS.
3. A firm has BVPS of $8, total equity of $4,000,000, and no preferred equity. Compute outstanding
shares.
4. ABC Corp has 2,500,000 shares, total equity of $12,000,000, and preferred equity of $2,000,000.
Find BVPS.
5. If a company’s BVPS is $10, total equity is $9,000,000, and preferred equity is $500,000,
determine outstanding shares.
18. Market-to-Book Ra o (M/B Ra o)
Problems:
1. A company has a market price per share of $20 and BVPS of $5. Find the M/B ra o.
2. XYZ Ltd. has an M/B ra o of 3.5 and a BVPS of $4. Calculate the market price per share.
3. A firm has a market price per share of $30 and an M/B ra o of 2. Compute BVPS.
4. ABC Corp has an M/B ra o of 4.2 and BVPS of $6. Find the market price per share.
5. If a company's market price per share is $50 and its M/B ra o is 5, determine BVPS.
19. Current Ra o
Problems:
1. A company has current assets of $600,000 and current liabili es of $300,000. Find the current
ra o.
2. XYZ Ltd. has a current ra o of 2.5 and current liabili es of $200,000. Calculate current assets.
3. A firm has current assets of $900,000 and a current ra o of 3. Compute current liabili es.
4. ABC Corp has current liabili es of $500,000 and a current ra o of 1.8. Find current assets.
5. If a company’s current assets are $1,200,000 and its current ra o is 2, determine current
liabili es.