Comprehensive Ratio Analysis The Jimenez Corporation’s forecasted…

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Question Answered step-by-step Comprehensive Ratio Analysis The Jimenez Corporation’s forecasted… Comprehensive Ratio AnalysisThe Jimenez Corporation’s forecasted 2020 financial statements follow, along with some industry average ratios.Jimenez Corporation: Forecasted Balance Sheet as of December 31, 2020 Assets Cash$    68,000Accounts receivable439,000Inventories898,000  Total current assets$1,405,000Fixed assets431,000Total assets$1,836,000Liabilities and Equity Accounts payable$   332,000Notes payable   114,000Accruals156,000  Total current liabilities$   602,000Long-term debt404,480Common stock574,810Retained earnings254,710Total liabilities and equity$1,836,000  Jimenez Corporation: Forecasted Income Statement for 2020Sales$4,290,000 Cost of goods sold3,703,000 Selling, general, and administrative expenses403,456   Earnings before interest and taxes (EBIT)$   183,544 Interest expense40,000   Earnings before taxes (EBT)$   143,544 Taxes (25%)35,886 Net income$   107,658 Jimenez Corporation: Per Share Data for 2020  EPS$  4.68 Cash dividends per share$  0.95 P/E ratio5.0 Market price (average)$23.40 Number of shares outstanding23,000 Industry Ratiosa  Quick ratio1.0 Current ratio2.7 Inventory turnoverb7.0 Days sales outstandingc32.0 daysFixed assets turnoverb13.0 Total assets turnoverb2.6 Return on assets9.1%Return on equity18.2%Profit margin on sales3.5%Debt-to-assets ratio21.0%Liabilities-to-assets ratio50.0%P/E ratio6.0 Market/Book ratio3.5 Notes: aIndustry average ratios have been stable for the past 4 years. bBased on year-end balance sheet figures. cCalculation is based on a 365-day year.  Calculate Jimenez’s 2020 forecasted ratios, compare them with the industry average data, and comment briefly on Jimenez’s projected strengths and weaknesses. Assume that there are no changes from the prior period to any of the operating balance sheet accounts. Do not round intermediate calculation. Round your answers to two decimal places.RatiosFirmIndustryCommentQuick ratio 1.0  Current ratio 2.7  Inventory turnover 7.0  Days sales outstanding 32 days   Fixed assets turnover 13.0   Total assets turnover 2.6  Return on assets    9.1% Return on equity 18.2% Profit margin on sales   3.5% Debt-to-assets ratio 21.0% Liabilities-to-assets ratio 50.0% P/E ratio 6.0  Market/Book ratio 3.5  So, the firm appears to be -Select-badlywellItem 27 managed. Business Finance FIN 340 Share QuestionEmailCopy link Comments (0)