91,250 Earnings $0 $27,050 $87,200 $149,200 Total Equity $27,000 $54,050 $141,250 $290,450 Total Debt and Equity $32,000 $218,463 $422,462 $585,426 Net Worth $27,000 $54,050 $141,250 $290,450 7. 7 Business Ratios Progressive Consulting will be formed as a consulting company specializing in marketing of high-technology products in international markets. Its founders are former marketers of consulting services, personal computers, and market research, all in international markets. They are founding Progressive to formalize the consulting services they offer. Ratio Analysis Profitability Ratios: 1995 1996 1997 ____________________________________________________________________ Gross margin 72.97% 85.81% 84.90% Net profit margin 4.57% 11.25% 14.92% Return on Assets 12.38% 20.64% 25.49% Return on Equity 50.05% 61.73% 51.37% Activity Ratios: AR Turnover 6.30 7.77 6.66 Collection days 29 45 45 Inventory Turnover 0.00 0.00 0.00 Accts payable turnover 7.67 7.06 7.35 Total asset turnover 2.71 1.83 1.71 Debt Ratios: 1995 1996 1997 ____________________________________________________________________ Debt to net Worth 3.04 1.99 1.02 Short-term Debt to Liab. 0.70 0.82 0.83 Liquidity Ratios: Current Ratio 1.91 1.83 2.39 Quick Ratio 1.91 1.83 2.39 Net Working Capital $104,050 $191,250 $340,450 Interest Coverage 4.15 5.90 9.38...
