The Following Ratios Have Been Calculated for Hi-Tech Toys

question 35

Essay

The following ratios have been calculated for Hi-Tech Toys.Analyze the capital structure, long-term solvency, and profitability of Hi-Tech Toys.

$\begin{array}{lrr}\text { Financial ratios }&2015&2014\\\hline\text { Leverage }\\\text { Debt ratio (\%) } & 65.3 & 57.2 \\\text { Long-term debt to total capital (\%) } & 46.8 & 17.6 \\\text { Times interest earned (times) } & (1.5) & 3.9 \\\text { Cash interest coverage (times) } & 4.1 & 9.2 \\\text { Fixed charge coverage (times) } & (0.4) & 2.8 \\\text { Cash flow adequacy (times) } & 0.3 & 0.8\\\text { Profitability }\\\text { Gross profit margin (\%) } & 54.7 & 58.6 \\\text { Operating profit margin (\%) } & (2.3) & 7.4 \\\text { Net profit margin (\%) } & (3.4) & 4.7 \\\text { Cash flow margin (\%) } & 4.3 & 8.9 \\\text { Return on assets (\%) } & (3.1) & 3.2 \\\text { Return on equity (\%) } & (10.7) & (9.9) \\\text { Cash return on assets (\%) } & 3.8 & 8.4\end{array}$

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