Principles of Managerial Finance

68

TABLE 2.8

Summary of Bartlett Company Ratios (2001–2003, Including 2003 Industry Averages)

Evaluation

d

Industry

Cross-

Time-

Year

average

sectional

series

Ratio

Formula

2001

a

2002

b

2003

b

2003

c

2003

2001–2003

Overall

LiquidityCurrent ratio

2.04

2.08

1.97

2.05

OK

OK

OK

Quick (acid-test) ratio

1.32

1.46

1.51

1.43

OK

good

good

ActivityInventory turnover

5.1

5.7

7.2

6.6

good

good

good

Average collection period

43.9 days

51.2 days

58.9 days

44.3 days

poor

poor

poorAverage payment period

75.8 days

81.2 days

94.1 days

66.5 days

poor

poor

poor

Total asset turnover

0.94

0.79

0.85

0.75

OK

OK

OK

Debt Debt ratio

36.8%

44.3%

45.7%

40.0%

OK

OK

OK

Times interest earned ratio

5.6

3.3

4.5

4.3

good

OK

OK

Fixed-payment coverage ratio

2.4

1.4

1.9

1.5

good

OK

good

Earnings before interest and taxes



Lease payments

Int.



Lease pay.



{(Prin.



Pref. div.)



[1/(1



T

)]}

Earnings before interest and taxes

Interest

Total liabilitiesTotal assets

Sales

Total assets

Accounts payable

Average purchases per day

Accounts receivableAverage sales per day

Cost of goods sold

Inventory

Current assets



Inventory



Current liabilities

Current assets

Current liabilities