Ryan boot company analysis. | Business & Finance homework help





A. Analyze Ryan Boot Company, using ratio analysis. Compute the ratios.

B. In your analysis, calculate the overall break-even point in sales dollars and the cash break-even point.







Ryan Boot Company

Analysis Ratios



Ryan Boot


Profit margin

$292,500 ÷ 7,000,000



Return on assets

$292,500 ÷ 8,130,000



Return on equity

$292,500 ÷ 2,880,000



Receivables turnover

$7,000,000 ÷ 3,000,000



Inventory turnover

$7,000,000 ÷ 1,000,000



Fixed asset turnover

$7,000,000 ÷ 4,000,000



Total asset turnover

$7,000,000 ÷ 8,130,000



Current ratio

$4,130,000 ÷ 2,750,000



Quick ratio

$3,130,000 ÷ 2,750,000



Debt to total assets

$5,250,000 ÷ 8,130,000



Interest coverage

$700,000 ÷ 250,000



Fixed charge coverage

($700,000 + $200,000)/$250,000 + $200,000 + ($65,000/ (1-.35)  = $900,000/$550,000









B. BEP in sales dollars

First we must calculate the contribution margin.

CM = Sales – Variable expenses

CM = $7,000,000 – 4,200,000

CM = $2,800,000


Contribution Margin Ratio = CM ÷ Sales

CMR = $2,800,000 ÷ 7,000,000

CMR = 40%


BEP = Total Fixed Assets ÷ CMR

BEP = $2,100,000 ÷ 40%

BEP = $5,250,000 in sales dollars


Cash BEP = same as above accept the non cash expenses would be removed from the fixed assets per the instructor help.


Cash BEP = (TFA – Non Cash expenses) ÷ CMR

Cash BEP = ($2,100,000 – 500,000) ÷ 40%

Cash BEP = $1,600,000 ÷ 40%

Cash BEP = $4,000,000





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