Question: Based upon your financial ratio analysis, whatquestions would you like to propose to management to gain clarityon the business operations?
Industry Financial Ratio Standards:
Ratio | Industry Norm | Milan Fashions Ratios2015 | Evaluation* |
Current ratio | 4.5 times | 13.25 | Good |
Long-term debt-to-Equity ratio | 12% | 5.36% | Good |
Debt-to-Equity ratio | 30% | 10.08% | Good |
Total Debt ratio | 20% | 9.16% | Good |
Financial leverage ratio | 1.10 | 1.1 | Fair |
Inventory turnover | 7 times | 6 times | Poor |
Fixed asset turnover | 1.8 times | 2.99 times | Good |
Debt-to-Capital ratio | 43.4% | 10.32% | Good |
Interest coverage ratio | 5.0 times | 18 times | Good |
Return on Assets | 8.4% | 2.15% | Poor |
Ratio | Industry Norm | Milan Fashions Ratios2016 | Evaluation* |
Current ratio | 4.5 times | 21.54 | Good |
Long-term debt-to-Equity ratio | 12% | 6.92% | Good |
Debt-to-Equity ratio | 30% | 9.86% | Good |
Total Debt ratio | 20% | 8.97% | Good |
Financial leverage ratio | 1.10 | 1.1 | Fair |
Inventory turnover | 7 times | 6 times | Poor |
Fixed asset turnover | 1.8 times | 2.6 times | Good |
Debt-to-Capital ratio | 43.4% | 10.17% | Good |
Interest coverage ratio | 5.0 times | 20 times | Good |
Return on Assets | 8.4% | 2.22% | Poor |
*Possible ratings: Good (Highest);Fair (Middle); Poor (Lowest)
