FIN630 Assignment No.1 Solution (Fall 2011)

Quick Ratio = Liquid Assets / Current Liabilities
Quick Ratio = (200,000 + 937,000 – 212,000) / 409,000 = 2.262
Net profit Margin = (Net Income / Revenue) x100
(501,50,000/105000,000) * 100 = 47.76%
Interest coverage ratio = Edit / Interest expenses
50150,000 / 2550,000 = 19.667
EPS = (Net income – Dividends on preferred stock) / average outstanding shares
(50150,000 – 1230,000) / 2000000
24.46
Intrinsic value of stock =
Ratios Industry Average Company’s ratio Ranking (Poor/good
or low/high)
Quick 1.75 times 2.262 Good +
Net Profit Margin 35% 47.76% High
Interest Coverage 16 Times 19.667 Good
Earning per share Rs. 1.35 24.46 Very High