The following data apply to Sagarmatha Company. Cash and marketable securities Rs. 10,000 Sales Rs. 100,000 Fixed assets Rs. 28,350 Net income Rs.…
BBS Fundamentals of Financial Management · 2079 · Solved Question with Answer
The following data apply to Sagarmatha Company.
| Cash and marketable securities | Rs. 10,000 | Sales | Rs. 100,000 |
| Fixed assets | Rs. 28,350 | Net income | Rs. 5,000 |
| Quick ratio | 2.0x | Current ratio | 3.0x |
| Days sales outstanding (DSO) | 40 days | Return on equity (ROE) | 12.00% |
Calculation is based on 360 days. Sagarmatha has not issued any preferred stock.
b. What are the limitations of ratio analysis?