Ryan boot company analysis. | Business & Finance homework help

Ryan boot company analysis. | Business & Finance homework helpQuestions   Problem: 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 CompanyAnalysis Ratios    Ryan Boot IndustryProfit margin $292,500 ÷ 7,000,000 4.18% 5.75%Return on assets $292,500 ÷ 8,130,000 3.60% 6.90%Return on equity $292,500 ÷ 2,880,000 10.16% 9.20xReceivables turnover $7,000,000 ÷ 3,000,000 2.33x 4.35xInventory turnover $7,000,000 ÷ 1,000,000 7.00x 6.50xFixed asset turnover $7,000,000 ÷ 4,000,000 1.75x 1.85xTotal asset turnover $7,000,000 ÷ 8,130,000 0.86x 1.20xCurrent ratio $4,130,000 ÷ 2,750,000 1.50x 1.45xQuick ratio $3,130,000 ÷ 2,750,000 1.14x 1.10xDebt to total assets $5,250,000 ÷ 8,130,000 64.58% 25.05%Interest coverage $700,000 ÷ 250,000 2.80x 5.35xFixed charge coverage ($700,000 + $200,000)/$250,000 + $200,000 + ($65,000/ (1-.35)  = $900,000/$550,000 1.64x 4.62xAnswer: B. BEP in sales dollarsFirst we must calculate the contribution margin.CM = Sales – Variable expensesCM = $7,000,000 – 4,200,000CM = $2,800,000 Contribution Margin Ratio = CM ÷ SalesCMR = $2,800,000 ÷ 7,000,000CMR = 40% BEP = Total Fixed Assets ÷ CMRBEP = $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) ÷ CMRCash BEP = ($2,100,000 – 500,000) ÷ 40%Cash BEP = $1,600,000 ÷ 40%Cash BEP = $4,000,000