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CASE 1 MGMT 480

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CASE 1 MGMT 480
Rana Ahmed
900100959
MGMT 480
Dr. Mohamed Hatem
1st of March
Case 1 Wave Riders

Financial Ratios Needed to Analyze the Case:

1. Quick Ratio: (Current assets- Inventory)/Current Liabilities

a) 1990: (1300-900)/483= 0.83
b) 1991: (1330-870)/512= 0.90
c) 1992: (1480-980)/595= 0.84
d) 1993: (1585-985)/680= 0.88
e) 1994: (1792-1242)/723= 0.76

2.Current Ratio: (Current Assets/Current Liabilities)

a) 1990: 1300/483= 2.69
b) 1991: 1330/512= 2.59
c) 1992: 1480/595= 2.48
d) 1993: 1585/680= 2.33
e) 1994: 1792/723= 2.47

3.Inventory to net working capital: Inventory/ (Current assets- Current liabilities)

a) 1990: 900/(1300-483)=1.10
b) 1991: 870/(1330-512)= 1.06
c) 1992: 980/(1480-595)=1.11
d) 1993: 985/(1585-680)= 1.09
e) 1994: 1242/(1792-723)=1.16

4. Operating profit Margin: Operating profit / sales

a) 1990: 156/2100= 0.07*100= 7%
b) 1991: 132/2120= 0.06*100= 6%
c) 1992: 116/2148= 0.05*100= 5%
d) 1993: 105/2226= 0.04*100= 4%
e) 1994: 97/2325= 0.04*100= 4%

5. Days of Inventory: Inventory/ (Cost of goods sold/365)

a) 1990: 900/(2100/365)= 156.43
b) 1991: 870/(2120/365)= 149.79
c) 1992: 980/(2148/365)= 166.52
d) 1993: 985/(2226/365)= 161.51
e) 1994: 1242/(2325/365)= 194.98

6.Inventory turnover: (Cost of sales/Inventory)

a) 1990: (2100-156)/900= 2.16
b) 1991: (2120-132)/870= 2.28
c) 1992: (2148-116)/980= 2.07
d) 1993: (2226-105)/985= 2.15
e) 1994: (2325-97)/1242= 1.79

7.Asset Turnover: (Sales/ Total Assets)

a) 1990: 2100/2304= 0.91
b) 1991: 2120/2350= 0.90
c) 1992: 2148/2512= 0.85
d) 1993: 2226/2645= 0.84
e) 1994: 2325/2889= 0.80

8.Fixed Asset Turnover: (Sales/ Fixed Assets)

a) 1990: 2100/1004= 2.09
b) 1991: 2120/1020= 2.08
c) 1992: 2148/1035= 2.08
d) 1993: 2226/1060= 2.10
e) 1994: 2325/1097= 2.12

9.Debt To Asset Ratio: (Total Debt/Total Assets)

a) 1990: 483/2304= 0.20*100= 20%
b) 1991: 512/2350= 0.21*100= 21%
c) 1992: 595/2512= 0.23*100= 23%
d) 1993: 680/2645= 0.25*100= 25%
e) 1994: 723/2889= 0.25*100= 25%

Conclusion Of Ratios:

1. Quick Ratio:
The
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