The following ratios have been calculated for Hi-Tech Toys.Analyze the capital structure, long-term solvency, and profitability of Hi-Tech Toys.
$\begin{array}{lrr} \text { Financial ratios }&2015&2014\ \hline\text { Leverage }\ \text { Debt ratio (\%) } & 65.3 & 57.2 \ \text { Long-term debt to total capital (\%) } & 46.8 & 17.6 \ \text { Times interest earned (times) } & (1.5) & 3.9 \ \text { Cash interest coverage (times) } & 4.1 & 9.2 \ \text { Fixed charge coverage (times) } & (0.4) & 2.8 \ \text { Cash flow adequacy (times) } & 0.3 & 0.8\\text { Profitability }\ \text { Gross profit margin (\%) } & 54.7 & 58.6 \ \text { Operating profit margin (\%) } & (2.3) & 7.4 \ \text { Net profit margin (\%) } & (3.4) & 4.7 \ \text { Cash flow margin (\%) } & 4.3 & 8.9 \ \text { Return on assets (\%) } & (3.1) & 3.2 \ \text { Return on equity (\%) } & (10.7) & (9.9) \ \text { Cash return on assets (\%) } & 3.8 & 8.4 \end{array}$

Question

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

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

Quizplus · Accepted Answer

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

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

The Following Ratios Have Been Calculated for Hi-Tech Toys