Calculate the Following Financial Ratios for Phone Corporation
Financial Ratios Practice Calculations
Now that yous have learned wellnigh 15 of the more than common financial ratios, we want you to experience computing them by using the amounts in a corporation’s financial statements. This will deepen your agreement and will help your retention for future apply.
The financial ratios to be calculated are bundled in the same order every bit they were discussed to a higher place:
 Financial ratios using amounts from the balance sheet
 Financial ratios using amounts from the income statement
 Fiscal ratios using amounts from the balance sheet and income argument
 Financial ratio using amounts from the argument of greenbacks flows
Calculating the Ratios Using Amounts from the Rest Canvas
Yous will be using the postobit remainder sheet to summate the kickoff group of financial ratios:
Calculations of Working Capital, Current Ratio, and Quick Ratio
Employ the amounts in Case Corporation’due south balance sheet (above) to calculate the following financial ratios:

Working capital every bit of December 31, 2021: $____________

Electric current ratio as of Dec 31, 2021: ______: ane

Quick ratio equally of December 31, 2021: ______: 1
You can check your answers using the following table:
Calculations of Debt to Disinterestedness and Debt to Total Avails Ratios
Go along using the amounts in Example Corporation’s residuum canvass to compute these two financial ratios:

Debt to equity ratio every bit of December 31, 2021: __________

Debt to total assets ratio as of December 31, 2021: _________
Y’all can check your answers using the following tabular array:
Calculating the Ratios Using Amounts from the Income Argument
The following
income statement
for Example Corporation should be used to calculate the 4 financial ratios which appear beneath it:
Calculations of Gross Margin, Profit Margin, Earnings Per Share, and Times Interest Earned
Employ the amounts in Example Corporation’s income statement (in a higher place) to compute these financial ratios:

Gross margin for the year concluded Dec 31, 2021: __________

Profit margin for the twelvemonth ended Dec 31, 2021: __________

Earnings per share for the yr ended December 31, 2021: ________

Times interest earned for the year ended December 31, 2021: ________
You can cheque your answers using the following table:
Calculating the Ratios Using an Amount from the Balance Sheet and the Income Statement
Financial ratios such equally the “turnover” ratios and the “return on” ratios will need one) an corporeality from the annual income statement, and 2) an
average
balance sheet amount.
An average balance sheet amount is needed since the residuum sheet reports the corporeality for only the
final moment
of the accounting year. For the required calculations that follow, we indicate the average balance canvass amount.
Calculations of the Ratios: Receivables Turnover, Twentyfour hour period’south Sales in Receivables, Inventory Turnover, Days’ Sales in Inventory, Return on Stockholders’ Equity
Calculate the following ratios using Instance Corporation’s income statement and
our calculated average balance sheet amounts* which are included in the following questions:

Receivables turnover ratio for the year 2021 assuming the
boilerplate*
accounts receivable balance during the year was computed to exist $42,000: __________ 
Days’ sales in receivables (average drove catamenia) for the yr 2021: __________

Inventory turnover ratio for the year 2021 assuming that the
boilerplate*
inventory balance during the twelvemonth was computed to exist $30,000: _________ 
Days’ sales in inventory (days to sell) for the twelvemonth 2021: _________

Render on stockholders’ equity for the yr 2021 assuming that the
average*
stockholders’ equity balance during the year was computed to be $278,000: _________
*We are providing the average residual sheet amounts based on the corporation’s internal records for all days in 2021. Using only the balance sheet amount from the final moment of 2021 (or the average of the last moment of 2020 and 2021) may not exist typical of the residuum sheet amount for all 365 days in the year.
Y’all tin can check your answers using the following table:
Computing a Ratio Using Amounts from the Statement of Cash Flows
Utilize the following statement of cash flows (SCF) for the related ratio calculation actualization after the SCF:
Calculation of Free Cash Flow
Using Example Corporation’s statement of cash flows (above), the corporeality of the corporation’s free greenbacks flow for the year 2021 was ________________.
You tin check your respond using the following table:
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introduction
to selected accounting and bookkeeping topics, and realize that some complexities (including differences between fiscal statement reporting and income tax reporting) are not presented. Therefore, always consult with accounting and tax professionals for assistance with your specific circumstances.
Calculate the Following Financial Ratios for Phone Corporation
Source: https://www.accountingcoach.com/financialratios/explanation/6