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Tire City's Financial Health Case Study

317 Words2 Pages
To evaluate Tire City’s financial health, we calculate ratios on three aspects of profitability, Activity, and liability and leverage. During the three years period, from 1993 to 1995 Tire City, Inc sales grew in average at 9.72% compound rate.
The company’s profit as a percentage of sales in 1993 was 5% which remained the same percentages in next two years.

TCI had a total of $ 5015 of capital at year-end 1995 and earned, interest but after taxes (EBIAT), $1163 In 1995. Its return on capital was % in 1995 which represented an increase/decrease from the _____% earned in 1993.

TCI had $5015 of owners’ equity and earned $ 1190 after taxes in 1995. Its return on equity was 24%, which hadn’t had any changes compare to 1993.Total asset turnover
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