Tire City

Tire City

Nestor Santamaria
MGT 324
Leopoldo Lopez
October 22nd, 2012
TIRE CITY
Assignment
Present Condition of the Firm: Do a profile of Tire City's financial health by calculating the following ratios from 1993 through 1995
      * Short Term Solvency or Liquidity: current ratio, quick ratio
Short term solvency of liquidity ratios | | |
| 1993 | 1994 | 1995 |
current asset | 4683 | 5542 | 6548 |
current liabilities | 2312 | 2882 | 3218 |
Current ratio | 2.02551903 | 1.92297016 | 2.03480423 |
| | | |
| | | |
Current asset | 4683 | 5542 | 6548 |
Inventory | 1630 | 1838 | 2190 |
current liabilities | 2312 | 2882 | 3218 |
Quick ratio | 1.32050173 | 1.2852186 | 1.3542573 |
      * Long Term Solvency: equity multiplier, total debt ratio, interest coverage ratio
Long term solvency ratios | | | |
| 1993 | 1994 | 1995 |
Total asset | 6580 | 7822 | 8983 |
Total equity | 3268 | 4065 | 5015 |
Equity multiplier | 2.01346389 | 1.92423124 | 1.79122632 |
| | | |
Total asset | 6580 | 7822 | 8983 |
Total equity | 3268 | 4065 | 5015 |
Total debt ratio | 0.50334347 | 0.48031194 | 0.44172326 |
| | | |
EBIT | 1445 | 1925 | 2209 |
Interest expense | 119 | 106 | 94 |
Interest coverage ratio | 12.1428571 | 18.1603774 | 23.5 |

      * Asset Management: total asset turnover
Asset Management ratios | | | |
| 1993 | 1994 | 1995 |
Sales | 16230 | 20355 | 23505 |
Total asset | 6580 | 7822 | 8983 |
Total asset turnover | 2.46656535 | 2.60227563 | 2.61660915 |
      * Profitability: profit margin, return on assets (ROA), return on equity (ROE),
Profitability ratios | | | |
| 1993 | 1994 | 1995 |
Net income | 780 | 997 | 1190 |
Sales | 16230 | 20355 | 23505 |
Profit margin | 0.04805915 | 0.04898059 | 0.05062753 |
| | | |
Net income | 780 | 997 | 1190 |
Total asset | 6580 | 7822 | 8983 |
Return on Asset | 0.11854103 | 0.12746101 | 0.13247245 |
| | | |
Net income | 780 | 997...

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