**Mangerial Accounting**

Instructions

For this assignment, use the BUS3061 Assignment u05a2 Template (listed under Resources).

On the template, you will find selected ratios for a company over a two-year period. Compare the ratios, and on a separate document (Word or Excel), submit your answers to the following questions:

What does the calculation of each ratio represent?

How does year one compare with year two, and what trend can be seen when you compare the two years?

Is the trend from year one to year two positive or negative?

What are the possible reasons for the trend?

What recommendations do you have for turning a negative trend to a positive trend?

# BUS3061 Fundamentals of Accounting

Ratio |
Year 1 |
Year 2 |

Current ratio |
3.12:1 |
2.96:1 |

Quick ratio |
1.34:1 |
1.02:1 |

Receivables turnover |
9.7 times |
10.2 times |

Inventory turnover |
2.4 times |
2.3 times |

Profit margin |
11.4% |
12.6% |

Asset turnover |
1.21 times |
1.22 times |

Return on assets |
13.7% |
15.4% |

Return on equity |
28.5% |
29.3% |

Price-earnings ratio |
10.4 times |
12.4 times |

Debt ratio |
50.2% |
45.3% |

Times interest earned |
9.6 times |
13.0 times |

**Category:**Business, General Business

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