Chapter 11
Financial Statement Analysis
561
iii. Managerial performance
iv. Leverage
AP-17A (
3
4
5
)
The bookkeeper for Contigo Corporation has calculated several ratios for the past three fiscal
years, shown below.
Required
a) For each of the ratios, indicate whether the ratio is improving or weakening overall from
the previous years.
Contigo Corporation
Ratio
2016
2015
2014 Improving or
Weakening?
Gross Profit Margin
32.80% 31.50% 31.10%
EBIT Percentage to Sales
18.04% 17.33% 17.11%
Interest Coverage Ratio
11.60
12.10
12.20
Current Ratio
1.50
1.31
0.97
Quick Ratio
0.90
0.79
0.73
Debt-to-Equity Ratio
0.53
0.61
0.86
Days-Sales-Outstanding
31.50
31.20
30.80
Inventory Days on Hand
78.10
76.54
73.41
