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https://www.chegg.com/homework-help/questions-and-answers/please-calculate-following-ratios-asset-turnover-operating-profit-margin-long-term-debt-eq-q31288018

Please Calculate the following ratios:

Asset turnover

Operating profit margin

Long-term debt to equity ratio

Current ratio

The Home Depot, Inc. Income Statement

Please Calculate the following ratios:

Asset turnover

Operating profit margin

Long-term debt to equity ratio

Current ratio

The Home Depot, Inc. Income Statement

All numbers in thousands Revenue 1/29/17 1/31/16 Total Revenue 94,595,000 88,519,000 Cost of Revenue 62,282,000 58,254,000 Gross Profit 32,313,000 30,265,000 Operating Expenses Research Development - - Selling General and Administrative 17,132,000 16,801,000 Non Recurring - - Others 1,754,000 1,690,000 Total Operating Expenses - - Operating Income or Loss 13,427,000 11,774,000 Income from Continuing Operations Total Other Income/Expenses Net 36,000 166,000 Earnings Before Interest and Taxes 13,463,000 11,940,000 Interest Expense 972,000 919,000 Income Before Tax 12,491,000 11,021,000 Income Tax Expense 4,534,000 4,012,000 Minority Interest - - Net Income From Continuing Ops 7,957,000 7,009,000 Non-recurring Events Discontinued Operations - - Extraordinary Items - - Effect Of Accounting Changes - - Other Items - - Net Income Net Income 7,957,000 7,009,000 Preferred Stock And Other Adjustments - - Net Income Applicable To Common Shares 7,957,000 7,009,000

Explanation / Answer

1) Asset turnover = Net sales/Average assets

net sales = 94,595,000 Average assets = (42966000+41973000)/2 = 42469500

= 94595000/42469500 = 2.23

2) Operating profit margin = operating profit/sales

  13,427,000/94595000 = 14.19%

3) Long term debt to equity = Long term debt/equity

  22,349,000/4,333,000 = 5.16

4) Current ratio = Current assets/current liability

17,724,000/14,133,000 = 1.25

Ratios Asset Turnover 2.23 Operating profit margin 14.19% Long term debt to equity 5.16 Current Ratio 1.25

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