How does Design Extravaganza Ltd. compare to the industry averages?

You have been asked to evaluate the historical performance of the company over the past five years.
January 4, 2018
Compute (a) the working capital, (b) the current ratio, and (c) the quick ratio. Round to one decimal place.
January 4, 2018
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How does Design Extravaganza Ltd. compare to the industry averages?

Design Extravaganza Ltd designs and retails formal wear sold in


Design Extravaganza Ltd. designs and retails formal wear sold in stores in North America, Asia, and Europe. Selected financial data (in thousands) for recent years are as follows:

Instructions

1. Determine the following measures for 2015 and 2014, rounding to one decimal place. Industry averages are provided in parentheses after each ratio.

a. Current ratio (1.9:1)

b. Accounts receivable turnover (13.6 times)

c. Inventory turnover (5.8 times)

d. Total asset turnover (1.5 times)

e. Debt ratio (56%)

f. Profit margin (3.1%)

g. Return on assets (4.6%)

h. Return on shareholders’ equity (10.5%)

2. Identify whether the liquidity, efficiency, solvency, and profitability ratios have improved or declined since 2014.

3. How does Design Extravaganza Ltd. compare to the industry averages?

Design Extravaganza Ltd designs and retails formal wear sold in

 

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