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  • Jan 2, 2009, 09:13 PM
    ivory5130
    Ratios for marketing
    How do I determine a companies cross sectional ratio and it's time-series ratio:confused:
  • Jan 4, 2009, 06:55 PM
    ivory5130

    This is what I have come up with thus far.

    Martin Manufacturing Company
    Historical and Industry Average Ratios

    Ratio Actual 2004 Actual 2005 Actual 2006 Industry Average 2006
    Current ratio 1.7 1.8 2.5 1.5
    Quick ratio 1.0 0.9 1.3 1.2
    Inventory turnover (times) 5.2 5.0 5.3 10.2
    Average collection period 50.7 days 55.8 days 57.9 days 46 days
    Total asset turnover (times) 1.5 1.5 1.6 2.0
    Debt ratio 45.8% 54.3% 57.0% 24.5%
    Times interest earned ratio 2.2 1.9 1.6 2.5
    Gross profit margin 27.5% 28.0% 27.0% 26.0%
    Net profit margin 1.1% 1.0% 0.6% 1.2%
    Return on total assets (ROA) 1.7% 1.5% 1.0% 2.4%
    Return on common equity (ROE) 3.1% 3.3% 2.5% 3.2%
    Price/earnings (P/E) ratio 33.5 38.7 34.5 43.4
    Market/book (M/B) ratio 1.0 1.1 0.9 1.2
  • Jan 4, 2009, 07:01 PM
    ivory5130
    cross-sectional analysis I summarized this The company's P/E ration is very low, implying that consumers and investors and thinking that the company is doing well. According to the M/B ratio, the hope in the future success of the company is dwindling. From a time-series analysis I summarized this Investor confidence, although promising three years ago, has now dwindled to the point of being very unfavorable. The neglect of long-term liabilities has hurt the market value of the company, leading to fewer people interested in the future of the company.
    Would my summaries be correct.

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