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Weaver Corp 2013 Financial Ratios Analysis

The document analyzes and calculates several financial ratios for Weaver Corporation including the current ratio, quick ratio, debt-to-total assets ratio, earnings per share, and market capitalization based on the company's 2013 financial statements.

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Cherry Htun
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139 views4 pages

Weaver Corp 2013 Financial Ratios Analysis

The document analyzes and calculates several financial ratios for Weaver Corporation including the current ratio, quick ratio, debt-to-total assets ratio, earnings per share, and market capitalization based on the company's 2013 financial statements.

Uploaded by

Cherry Htun
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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BUS 4404 – Principle of Finance 2

University of the People

Weaver Corporation Financial Statements


Current Ratio

The Current Ratio measures the ability of a company to pay off its short-term liabilities with its

short-term assets.

Total Current Assets


Current Ratio=
Total Current Liabilities

940,000
Current Ratio= =4.7
200,000

Quick Ratio

The Quick Ratio is an indicator of a company's short-term liquidity position and measures a

company's ability to meet its short-term obligations with its most liquid assets.

Total Current Assets−Inventories


Quick Ratio=
Total current liabilities

940,000−90,000
Quick Ratio= =4.25
200,000

Debt-to-Total Assets Ratio

This ratio measures the percentage of total assets financed by creditors. It's calculated by

dividing total liabilities by total assets.

Total Liabilities
Debt −¿−Total Assets Ratio=
Total Assets

1,000,000
Debt −¿−total assets ratio= =0.4211 ( 42.11% )
2,375,000

Earnings Per Share (EPS)


EPS is calculated by dividing the net income by the number of outstanding shares. Assuming the

common stock represents the total shares outstanding and given the par value, we can estimate

the number of shares (U.S. Securities and Exchange Commission, n.d.)

Net income
EPS=
Number of shares outstanding

Common Stock Value 100,000


Number of shares= = =200,000 shares
Per Value Per share 0.5

160,000
EPS= =0.80 per share
200,000

Market Capitalization

Market capitalization is calculated by multiplying the current stock price by the total number of

shares outstanding.

Market Capitalization=Stock Price× Number of Shares

Market Capitalization=16 ×200,000=3,200,000

These ratios provide insights into Weaver Corporation's financial health and performance in

2013. The Current and Quick Ratios indicate a strong liquidity position, the Debt-to-Total Assets

Ratio shows a moderate level of leverage, and the EPS and Market Capitalization offer a

perspective on the company’s profitability and market value respectively.


Reference

U.S. Securities and Exchange Commission. (n.d.). Beginner's Guide to Financial Statements.

https://www.sec.gov/reportspubs/investor-publications/investorpubsbegfinstmtguide

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