Title: Calculating and Analyzing Ratios

Based on the financial information provided, calculate the following ratios and explain their purpose:

Current Ratio

Inventory Turnover Ratio

Accounts Receivable Turnover Ratio

Debt to Equity Ratio

Return on Assets Ratio

Asset Turnover Ratio

Return on Equity Ratio

Profit Margin Ratio

Price-Earnings Ratio

Dividend Yield Ratio

Click here to download the financial statements.

Note: When a balance sheet amount is related to an income statement amount in computing a ratio, the balance sheet amount should be an average of that period. T

he average is calculated by adding the ending balances of this year and last year and dividing the result by 2. Describe how a bank lending officer might use ratio analysis.

Select five ratios that would be most useful for the purpose and explain the rationale for your selection.

Submission Requirements: Submit your answers in a Microsoft (MS) Word file. Font: Arial, 12 point, double-spaced