Comprehensive Ratio Analysis

Tuxedo Corporation's condensed comparative income statements and balance sheets follow. All figures are given in thousands of dollars, except earnings per share.

Tuxedo Corporation
Comparative Income Statements
For the Years Ended December 31, 2014 and 2013
	2014		2013
Net sales	$800,400		$742,600
Cost of goods sold	454,100		396,200
Gross margin	$346,300		$346,400
Operating expenses:
Selling expenses	$130,100		$104,600
Administrative expenses	140,300		115,500
Total operating expenses	$270,400		$220,100
Income from operations	$ 75,900		$126,300
Interest expense	25,000		20,000
Income before income taxes	$ 50,900		$106,300
Income taxes expense	14,000		35,000
Net income	$ 36,900		$ 71,300
Earnings per share	$ 2.46		$ 4.76
Tuxedo Corporation
Comparative Balance Sheets
For the Years Ended December 31, 2014 and 2013
	2014		2013
Assets
Cash	$ 31,100		$ 27,200
Accounts receivable (net)	72,500		42,700
Inventory	122,600		107,800
Property, plant, and equipment (net)	577,700		507,500
Total assets	$803,900		$685,200
Liabilities and Stockholders' Equity
Accounts payable	$104,700		$ 72,300
Notes payable (short-term)	50,000		50,000
Bonds payable	200,000		110,000
Common stock, $10 par value	300,000		300,000
Retained earnings	149,200		152,900
Total liabilities and stockholders' equity	$803,900		$685,200
Additional data for Tuxedo in 2014 and 2013 follow.
	2014		2013
Net cash flows from operating activities	$64,000		$99,000
Net capital expenditures	$119,000		$38,000
Dividends paid	$31,400		$35,000
Number of common shares	30,000		30,000
Market price per share	$80		$120

Balances of selected accounts at the end of 2012 were accounts receivable (net), $52,700; inventory, $99,400; accounts payable, $64,800; total assets, $647,800; and stockholders' equity, $376,600. All of the bonds payable were long-term liabilities. Assume 365 days in a year.

Note: For all parts below, round percentages and ratios to one decimal place. When determining whether each ratio improved or deteriorated from 2013 to 2014, consider the ratio changes of .1 or less to be neutral and select "Neutral" from the selection box.

1. Prepare an operating asset management analysis by calculating for each year the (a) current ratio, (b) quick ratio, (c) receivable turnover, (d) days' sales uncollected, (e) inventory turnover, (f) days' inventory on hand, (g) payables turnover, (h) days' payable, and (i) financing period. After making the calculations, indicate whether each ratio improved or deteriorated from 2013 to 2014.

	Ratio	2014		2013		Favorable or Unfavorable Change
a.	Current ratio:		times		times	SelectFavorableUnfavorableNeutralItem 3
b.	Quick ratio:		times		times	SelectFavorableUnfavorableNeutralItem 6
c.	Receivable turnover:		times		times	SelectFavorableUnfavorableNeutralItem 9
d.	Days' sales uncollected:		days		days	SelectFavorableUnfavorableNeutralItem 12
e.	Inventory turnover:		times		times	SelectFavorableUnfavorableNeutralItem 15
f.	Days' inventory on hand:		days		days	SelectFavorableUnfavorableNeutralItem 18
g.	Payables turnover:		times		times	SelectFavorableUnfavorableNeutralItem 21
h.	Days' payable:		days		days	SelectFavorableUnfavorableNeutralItem 24
f.	Financing period:		days		days	SelectFavorableUnfavorableNeutralItem 27

2. Prepare a profitability and total asset management analysis by calculating for each year the (a) profit margin, (b) asset turnover, and (c) return on assets. After making the calculations, indicate whether each ratio improved or deteriorated from 2013 to 2014.

	Ratio	2014		2013		Favorable or Unfavorable Change
a.	Profit margin:		%		%	SelectFavorableUnfavorableNeutralItem 30
b.	Asset turnover:		times		times	SelectFavorableUnfavorableNeutralItem 33
c.	Return on assets:		%		%	SelectFavorableUnfavorableNeutralItem 36

3. Prepare a financial risk analysis by calculating for each year the (a) debt to equity ratio, (b) return on equity, and (c) Interest Coverage Ratio. After making the calculations, indicate whether each ratio improved or deteriorated from 2013 to 2014.

	Ratio	2014	2013	Favorable or Unfavorable Change
a.	Debt to equity ratio:	times	times	SelectFavorableUnfavorableNeutralItem 39
b.	Return on equity:	%	%	SelectFavorableUnfavorableNeutralItem 42
c.	Interest coverage ratio:	times	times	SelectFavorableUnfavorableNeutralItem 45

4. Prepare a liquidity analysis by calculating for each year the (a) cash flow yield, (b) cash flows to sales, (c) cash flows to assets, and (d) free cash flow. After making the calculations, indicate whether each ratio improved or deteriorated from 2013 to 2014. If required, use the minus sign to indicate a negative free cash flow.

	Ratio	2014		2013		Favorable or Unfavorable Change
a.	Cash flow yield:		times		times	SelectFavorableUnfavorableNeutralItem 48
b.	Cash flows to sales:		%		%	SelectFavorableUnfavorableNeutralItem 51
c.	Cash flows to assets:		%		%	SelectFavorableUnfavorableNeutralItem 54
d.	Free cash flow:	$		$		SelectFavorableUnfavorableNeutralItem 57

5. Prepare an analysis of market strength by calculating for each year the (a) price/earnings (P/E) ratio and (b) dividends yield. After making the calculations, indicate whether each ratio improved or deteriorated from 2013 to 2014. For dividends yield, round intermediate calculations to the nearest cent.

	Ratio	2014		2013		Favorable or Unfavorable Change
a.	Price/earnings ratio:		times		times	SelectFavorableUnfavorableNeutralItem 60
b.	Dividends yield:		%		%	SelectFavorableUnfavorableNeutralItem 63