Q1:
Compute the following ratios using the statements of Coca Cola for the year 2013 and 2012. Comment on the results and use the year 2012 as a benchmark for the year 2013.
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2013
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2012
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Current Ratio = Current Assets ÷Current Liabilities
Quick Ratio = (Current Assets- Inventory) ÷Current Liabilities
Inventory turnover = Cost of goods sold ÷ Inventory
Average Age of Inventory = (Inventory ÷ CGS) *365
Average Collection Period = (Receivables ÷ Sales) *365
Average Payments Period = (Payables ÷ CGS) *365
Total asset turnover = Sales ÷ Total assets
Debt ratio = Total liabilities ÷ Total assets
Times interest earned ratio = EBIT ÷ Interest
Gross Profit Margin = (Sales - CGS) ÷ Sales
Operating profit margin = (Sales - CGS - Depreciation) ÷ sales
Profit Margin = Net Income÷ Sales
Return on Assets (ROA) = Net Income ÷ Total assets
Return on Equity (ROE) = Net Income ÷ Total Equity
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Current Ratio
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Quick Ratio
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Inventory turnover
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Average Age of Inventory
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Average Collection Period
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Average Payments Period
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Total Asset Turnover
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Debt ratio
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Times interest earned ratio
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Gross Profit Margin
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Operating profit margin
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Profit Margin
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Return on Assets (ROA)
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Return on Equity (ROE)
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Comments on the above results:
Students should provide a report about the above results. They should comment on liquidity, profitability, and efficiency of the above company.
Q2. Discuss the pros and cons of using perpetuity in real estate valuations?