Analyze the following ratios (Good/Not good, Undervalued/Overvalued, or just OK) based on the given industry averages. Write the answers in the spaces provided. RatiosAnnual DataIndustry AverageInterpretationCurrent5.74 Days Sales Outstanding37 days42 days Total Debt to Total Capital47.80%32.60% Times-Interest Earned2.26 Profit Margin6.10%6.00% Return on Invested Capital10.03%10.00% Enterprise Value to EBITDA0.871.12 Provide a decision for each analysis.

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Answered: Analyze the following ratios (Good/Not…

Entrepreneurial Finance

6th Edition

ISBN:9781337635653

Author:Leach

Publisher:Leach

Chapter9: Projecting Financial Statements

Section: Chapter Questions

Problem 1aM

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Analyze the following ratios (Good/Not good, Undervalued/Overvalued, or just OK) based on the given industry averages. Write the answers in the spaces provided.

Ratios	Annual Data	Industry Average	Interpretation
Current	5.7	4
Days Sales Outstanding	37 days	42 days
Total Debt to Total Capital	47.80%	32.60%
Times-Interest Earned	2.2	6
Profit Margin	6.10%	6.00%
Return on Invested Capital	10.03%	10.00%
Enterprise Value to EBITDA	0.87	1.12

Provide a decision for each analysis.

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