Principles of Managerial Finance, 15th Edition

3.8 A Complete Ratio Analysis

1. LG6

In this section we summarize the ratio analysis that we’ve performed for Whole Foods, and we introduce another approach for using ratios to diagnose problems with a firm’s profitability—the DuPont method.

Summary of Whole Foods’ Financial Condition

Table 3.10 summarizes many of the ratios we’ve calculated for Whole Foods. The table shows ratio values for 2015 and 2016, the industry average ratio (where available), and the formula for each ratio. Using these data, we can discuss the five key aspects of the firm’s performance: liquidity, activity, debt, profitability, and market.

Table 3.10

Summary of Whole Foods’ Ratios (2015–2016, Including 2016 Industry Averages)

Table 3.10 Full Alternative Text

Liquidity ...