Task: Ratio analysis—comprehensive problem, 2011 data This problem is based on the 2011 annual report of Campbell Soup Company in the appendix.
Required:
Problem a. Compute the following profitability measures for the year ended July 31, 2011:
1. Return on investment, based on net earnings (perform a DuPont analysis).
2. Return on equity, based on net earnings and total equity.
3. Price/earnings ratio. Use $33.05 as the year-end market price.
4. Dividend yield.
5. Dividend payout ratio.
Problem b. Compute the following liquidity measures at July 31, 2011:
1. Working capital.
2. Current ratio.
3. Acid-test ratio.
Problem c. Compute the following activity measures for the year ended July 31, 2011:
1. Number of days' sales in accounts receivable, based on a 365-day year.
2. Number of days' sales in inventory, based on a 365-day year.
3. Accounts receivable turnover.
4. Inventory turnover.
5. Turnover of net property, plant, and equipment.
Problem d. Compute the following financial leverage measures at July 31, 2011:
1. Debt ratio.
2. Debt/equity ratio.
Problem e. Compute the following physical measures of Campbell's profitability at July 31, 2011:
1. Net sales per employee.
2. Operating income per employee. (Note: In a page not reproduced in the appendix, Campbell's 2011 annual report disclosed that on July 31, 2011, the company had approximately 17,500 employees.)