Cango Financial Analysis

Ratio Formula (express the ratio in words) Detailed calculation (actual numbers from financial statements used for the calculation) Final number (final result of the detailed calculation) Explanation of why ratio is important Earned points (up to 3 points per "box"/cell) Instructor feedback

Example: Term A/Term B (Term A divided by Term B) 1000/2000 .50 This is the explanation of the role of this ratio and why it is important 3

Efficiency Ratio: Receivables Turnover Net Sales Revenue/Accounts Receivable 50,000,000/33,000,000 1.52 Measures ability to collect cash from credit customers

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Efficiency Ratio: Inventory Turnover Cost of Goods Sold/Total Inventory 9,000,000/32,000,000 0.28 Represents how quickly inventory is moved

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Financial Leverage Ratio: Debt/Equity Ratio Total Liabilities/Shareholders Equity 94,900,000/141,000,000 0.67 Shows perccentage of debt financing to equity financing. If there is a high ratiom then there is a high financial risk.

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Liquidity Ratio: Current Ratio Total Current Assets/Total Current Liabilties 202,020,000/37,500,000 5.39 Shows companies ability to pay current liabiltiy with current assets.

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Liquidity Ratio: Quick Ratio (Total Current Assets-Total Inventory)/Total Current Liabilities 170,020,000/37,500,000 4.53 Measures if company can pay its liability if it were all due immediately

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Liquidity: Working Capital Total Currents Assets-Total Current Liabilities 202,020,000-37,500,000 164520000 Shows companies ability to pay to pay its debt.

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Profitability Ratio: Return on Assets Net Income/Total Liabilities and owners Equity 5,486,000/235,900,000 2.33 Shows how much net income was generated for each $1 of assets that the company has.

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Profitability Ratio: Return on Sales Net Income/Net Sales Revenue 5,486,000/50,000,000 10.97 Shows...