FIN401 Chips (Purchase)-5

Financial statement analysis The financial statements of Zach Industries for the year ended December 31, 2019, follow . a. Use the financial statements to complete the following table E. Assume the industry averages given in the table are applicable for both 2018 and 2019. b. Analyze Zach Industries' financial condition as it is related to (1) liquidity, (2) activity, (3) debt, (4) profitability, and (5) market. Summarize the company's overall financial condition. ..... a. The current ratio is 1.04. (Round to two decimal places.) The quick ratio is .38. (Round to two decimal places.) The inventory turnover is 2.32. (Round to two decimal places.) The average collection period is 56.1 days. (Round to one decimal place.) The debt ratio is 61.7 %. (Round to one decimal place.) The times interest earned ratio is |. (Round to one decimal place.)

Module pute Net Operating Profit after Tax Refer to the balance sheet information below for Home Depot. Feb. 3, 2019 Jan. 28, 2018 $35,891 $34,794 1,511 3,056 $37,402 $37,850 $14,177 $13,640 24,822 22,974 $38,999 $36,614 Operating assets Nonoperating assets Total assets $ millions Operating liabilities Nonoperating liabilities Total liabilities Net sales Operating expense before tax Net operating profit before tax (NOPBT) Other expense Income before tax Tax expense Net income Assume a statutory tax rate of 22%. a. Compute NOPAT for the year ended Feb. 3, 2019 using the formula: NOPAT = Net income + NNE Net income NNE NOPAT $ 9,453 $ $ $91,973 78,772 13,201 828 12,373 2,920 $9,453 7,361 * $ 16814 b. Compute NOPAT for the year ended Feb. 3, 2019 using the formula: NOPAT = NOPBT - Tax on operating profit NOPBT Tax on operating profit 7,361 * $ 10,296.78 x $ NOPAT -2936

Sales Revenue $983,000 Cost of Goods Sold 489,000 Operating Expenses 243,000 Use this information to construct an income statement for the year 2019.

Sales Allowances Fitz-Chivalry Corporation reports the following information on its 2019 income statement. $ millions Gross sales 2017 2018 2019 $27,694 $30,738 $36,714 Allowance for sales returns Net sales 1,940 2,156 2,185 $25,754 $28,582 $34,529 Required Analysis of financial statements from prior years shows that the company consistently estimates the allowance for sales returns at about 7% of gross sales. What adjustment, if any, would we make to the 2019 income statement? Assume the company's combined federal and state tax rate is 24%. Hint: For adjustments to the income statement, we assume the normal 7% for the ratio of Allowance for sales returns to Gross sales for each year. Determine the 2019 adjusted allowance for sales return. (Round answer to nearest whole number.) $ millions Adjusted (total) allowance for sales returns $ 2019 0 Using the adjusted (total) allowance for sales returns computed above, determine the 2019 adjustments for the following income statement items.…

Operating data for Joshua Corporation are presented below. 2020 2019 Sales revenue $745,000 $595,000 Cost of goods sold 459,665 384,965 Selling expenses 114,730 67,235 Administrative expenses 55,130 48,790

STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED DECEMBER 31     2020 2019 2018 Turnover 373,578 424,486 456,300 Cost of sales (253,604) (254,210) (198,900) Gross profit 119,974 170,276 257,400 Impairment of financial assets (2,477) (1,800) (5,400) Distribution costs (87,036) (91,309) (96,100) Administrative expenses (32,556) (50,656) (67,200) Other operating income 2,369 10,039    3,500 Operating profit 274 36,550 92,200 Finance income 2,594 4,949 7,200 Finance costs (2,069) (2,765) (3,400) Profit before income tax 799 38,734 96,000 Income tax expense (285) (13,718) (15,450) Profit for the year 514 25,016   80,550 Other comprehensive income - - - Total comprehensive income 514 25,016 80,550 Table 1 Source (Author, 2022)         CLOUD 9 LTD STATEMENT OF FINANCIAL POSITION AS AT DECEMBER 31     Non-current…

Sales revenue Cost of goods sold Gross profit Expenses Pretax income Income tax expense (30%) Net income 2016 $2,033,000 1,487,000 2017 $2,451,000 2018 $2,717,000 2019 $2,994,000 1,617,000 1,768,000 2,093,000 546,000 834,000 949,000 901,000 488,000 494,000 522,000 532,000 58,000 340,000 427,000 369,000 17,400 102,000 128,100 110,700 $40,600 $238,000 $298,900 $258,300 An audit revealed that in determining these amounts, the ending inventory for 2017 was overstated by $19,000. The company uses a periodic inventory system. 2. Compute the gross profit percentage for each year before the correction and after the correction. Note: Round your answers to the nearest whole percent. 2016 2017 2018 2019 Before correction % % % % After correction % % % %

2021 2020 2019 2018 2017 Sales $ 489,967 $ 322,347 $ 256,850 $ 180,880 $ 136,000 Cost of goods sold 252,383 166,097 134,444 94,199 69,360 Accounts receivable 23,763 18,857 17,594 10,600 9,302 Compute trend percents for the above accounts, using 2017 as the base year. For each of the three accounts, state whether the situation as revealed by the trend percents appears to be favorable or unfavorable.

Mac Donald company reported the following on its comparative income statement:     2017 2018 2019 Revenue 9,000 10,000 14,000 Cost of goods sold 6,000 4,000 9,000   Prepare a horizontal analysis of revenue , cost of goods sold and gross profit

Company XYZ it made sales of $230,000 during 2019 the fixed expenses were $90,000 and variable expense with $50,000 the cost of goods as sold was $35,000 calculate the gross margin for XYZ

Excerpts from the annual report of XYZ Corporation follow: 2019 $675,138 $241,154 $64,150 $93,650 $25,100 2020 Cost of goods sold Inventory Net income $754,661 $219,686 $31,185 $68,685 $26,900 Retained earnings LIFO reserve Tax rate 20% 20% If XYZ used FIFO, its net income for fiscal 2020 would be O a. $34,165 O b. $30,375 O c. $32,625 d. $36,545

Selected information from Bigg Company's financial statements follows: Fiscal Year Ended December 31 2019 2018 2017 (in thousands) Gross sales $2,004,719 $1,937,021 $1,835,987 Less: Sales discounts 4,811 4,649 4,406 Less: Sales returns and allowances 2,406 2,324 2,203 Net sales $1,997,502 $1,930,048 $1,829,378 Cost of goods sold 621,463 619,847 660,955 Gross profit $1,376,039 $1,310,201 $1,168,423 Operating expenses 577,369 595,226 583,555 Operating income $798,670 $714,975 $584,868 Other income (expenses) 15,973 (6,070) (8,773) Net income $814,643 $708,905 $576,095 At December 31 2019 2018 2017 (in thousands) Accounts receivable $201,290 $195,427 $182,642 Less: Allowance for doubtful accounts 2,516 2,736 2,192 Net accounts receivable $198,774 $192,691 $180,450 Required: 1. Calculate the following ratios for 2018 and 2019. Round your answers to two decimal places. 2018 2019 a. Gross profit margin 67.88 % 68.89 % b. Operating margin 37.04 39.98 c. Net profit margin х % 36.77 40.78 % d.…

Computron's Income Statement                                   2019 2020 INCOME STATEMENT             Net sales          $           2,059,200  $               3,500,640 Cost of Goods Sold (Except depr. and amort.)        $           1,718,400  $               2,988,000 Other Expenses          $              204,000  $                   432,000 Depreciation and amortization        $                 11,340  $                     70,176 Total Operating Costs        $           1,933,740  $               3,490,176 Earnings before interest and taxes (EBIT)        $              125,460  $                     10,464 Less interest           $                 37,500  $                   105,600 Pre-tax earnings          $                 87,960  $                  (95,136) Taxes (40%)          $                 35,184  $                  (38,054) Net Income           $                 52,776  $                  (57,082)…

LOGIC COMPANY     Comparative Income Statement     For Years Ended December 31, 2017 and 2018                       2018 2017   Gross sales $ 21,600   $ 16,950     Sales returns and allowances   900     100     Net sales $ 20,700   $ 16,850     Cost of merchandise (goods) sold   11,350     8,300     Gross profit $ 9,350   $ 8,550     Operating expenses:               Depreciation $ 960   $ 730     Selling and administrative   4,150     3,300     Research   810     630     Miscellaneous   620     430     Total operating expenses $ 6,540   $ 5,090     Income before interest and taxes $ 2,810   $ 3,460     Interest expense   820     630     Income before taxes $ 1,990   $ 2,830     Provision for taxes   796     1,132     Net income $ 1,194   $ 1,698         LOGIC COMPANY     Comparative Balance Sheet     December 31, 2017 and 2018                   2018 2017   Assets               Current assets:               Cash $ 13,300   $…

LOGIC COMPANY     Comparative Income Statement     For Years Ended December 31, 2017 and 2018                       2018 2017   Gross sales $ 21,200   $ 16,650     Sales returns and allowances   800     100     Net sales $ 20,400   $ 16,550     Cost of merchandise (goods) sold   11,450     8,400     Gross profit $ 8,950   $ 8,150     Operating expenses:               Depreciation $ 920   $ 710     Selling and administrative   3,850     3,100     Research   770     610     Miscellaneous   580     410     Total operating expenses $ 6,120   $ 4,830     Income before interest and taxes $ 2,830   $ 3,320     Interest expense   780     610     Income before taxes $ 2,050   $ 2,710     Provision for taxes   820     1,084     Net income $ 1,230   $ 1,626         LOGIC COMPANY     Comparative Balance Sheet     December 31, 2017 and 2018                   2018 2017   Assets               Current assets:               Cash $ 13,100   $…

Selected information from Bigg Company's financial statements follows:       Fiscal Year Ended December 31     2019   2018(in thousands)   2017 Gross sales   $2,004,719   $1,937,021   $1,835,987 Less: Sales discounts   4,811   4,649   4,406 Less: Sales returns and allowances   2,406   2,324   2,203 Net sales   $1,997,502   $1,930,048   $1,829,378 Cost of goods sold   621,463   619,847   660,955 Gross profit   $1,376,039   $1,310,201   $1,168,423 Operating expenses   577,369   595,226   583,555 Operating income   $798,670   $714,975   $584,868 Other income (expenses)   15,973   (6,140)   (8,773) Net income   $814,643   $708,835   $576,095       At December 31     2019   2018(in thousands)   2017 Accounts receivable   $201,290   $195,427   $182,642 Less: Allowance for doubtful accounts   2,516   2,736   2,192 Net accounts receivable   $198,774   $192,691   $180,450 Required: 1.  Calculate the following ratios for 2018 and 2019. Round your answers…

Income Statement (Extract) for the year ended 31 March   2018 2019   £ £ Sales 3,000,000 5,400,000 Less: Cost of Sales 2,400,000 4,320,000 Gross Profit 600,000 1,080,000 Less: Expenses 360,000 500,000 Operating Profit 240,000 580,000   Statement of Financial Position (Extract) as at 31 March   2018 2019   £ £ Non- Current Assets 364,000 512,000 Current Assets     Inventory 480,000 1,440,000 Trade Receivables 396,000 812,000 Total Assets £1,240,000 £2,764,000 Capital & Reserves     Ordinary Share Capital 140,000 240,000 Reserves 260,000 560,000 Non-Current Liabilities 440,000 500,000 Trade Payables 320,000 724,000 Bank Overdraft 80,000 740,000 Total Equity and Liabilities £1,240,000 £2,764,000   Calculate :  Trade Receivable Days  Trade Payable Days Non-current assets turnover

Draper Consulting Inc. Income Statement Year Ended December 31, 2019 Sales Revenue   925,000 Less:  Cost of Goods Sold   490,000 Gross Profit   435,000 Expenses:          Wages Expense 207,000        Depreciation Expense 62,000        Insurance Expense 17,000        Interest Expense 12,000        Income Tax Expense 57,000             Total Expense   355,000 Other Income and (Expenses):          Gain on Sale of Equipment   16,000 Net Income   96,000   Draper Consulting Inc. Balance Sheet December 31, 2019 and 2018   2019 2018 Assets: Current Assets:          Cash 25,000 33,000      Accounts Receivable 68,000 51,000      Inventory 177,000 126,000      Prepaid Insurance 8,000 11,000           Total Current Assets 278,000 221,000 Plant Assets:          Equipment 887,000 763,000…

Draper Consulting Inc. Income Statement Year Ended December 31, 2019 Sales Revenue   925,000 Less:  Cost of Goods Sold   490,000 Gross Profit   435,000 Expenses:          Wages Expense 207,000        Depreciation Expense 62,000        Insurance Expense 17,000        Interest Expense 12,000        Income Tax Expense 57,000             Total Expense   355,000 Other Income and (Expenses):          Gain on Sale of Equipment   16,000 Net Income   96,000   Draper Consulting Inc. Balance Sheet December 31, 2019 and 2018   2019 2018 Assets: Current Assets:          Cash 25,000 33,000      Accounts Receivable 68,000 51,000      Inventory 177,000 126,000      Prepaid Insurance 8,000 11,000           Total Current Assets 278,000 221,000 Plant Assets:          Equipment 887,000 763,000…

LOGIC COMPANY     Comparative Income Statement     For Years Ended December 31, 2017 and 2018                       2018 2017   Gross sales $ 20,400   $ 16,050     Sales returns and allowances   900     100     Net sales $ 19,500   $ 15,950     Cost of merchandise (goods) sold   11,650     8,650     Gross profit $ 7,850   $ 7,300     Operating expenses:               Depreciation $ 840   $ 670     Selling and administrative   3,250     2,700     Research   690     570     Miscellaneous   500     370     Total operating expenses $ 5,280   $ 4,310     Income before interest and taxes $ 2,570   $ 2,990     Interest expense   700     570     Income before taxes $ 1,870   $ 2,420     Provision for taxes   748     968     Net income $ 1,122   $ 1,452         LOGIC COMPANY     Comparative Balance Sheet     December 31, 2017 and 2018                   2018 2017   Assets               Current assets:               Cash $ 12,700   $…

Precision Tools 2021 Income Statement Net sales Less: Cost of goods sold Less: Depreciation Earnings before interest and taxes Less: Interest paid $36,408 28,225 1,760 6,423 510 5,913 Taxable Income Less: Taxes 2.070 $3.843 Net Income Precision Tools 2020 and 2021 Balance Sheets 2020 2021 2020 2021 $ Cash 2,060 1,003 Accounts 7,250 8,384 payable Accounts 3,411 4,218 receivable 21.908 27,129 Inventory 18,776 24,247 17,500 3.825 Common stock Retained earnings Total liability & 15,000 Net fixed assets 14,160 14.080 6.357 Total assets 38.407 41,209 38,407 41,209 equity What is the times interest earned ratio for 2021?

LOGIC COMPANY     Comparative Income Statement     For Years Ended December 31, 2017 and 2018                       2018 2017   Gross sales $ 19,600   $ 15,450     Sales returns and allowances   1,000     100     Net sales $ 18,600   $ 15,350     Cost of merchandise (goods) sold   11,850     8,850     Gross profit $ 6,750   $ 6,500     Operating expenses:               Depreciation $ 760   $ 630     Selling and administrative   2,650     2,300     Research   610     530     Miscellaneous   420     330     Total operating expenses $ 4,440   $ 3,790     Income before interest and taxes $ 2,310   $ 2,710     Interest expense   620     530     Income before taxes $ 1,690   $ 2,180     Provision for taxes   676     872     Net income $ 1,014   $ 1,308         LOGIC COMPANY     Comparative Balance Sheet     December 31, 2017 and 2018                   2018 2017   Assets               Current assets:               Cash $ 12,300   $…

2021 2020 2019 2018 2017 $ 394,032 199,466 19,071 $ 262,688 132,894 15,394 $ 205,225 $ 150,348 76,774 8,780 $ 112,200 56,100 Sales Cost of goods sold Accounts receivable 106,013 14,058 7,708 Compute trend percents for the above accounts, using 2017 as the base year. For each of the three accounts, state whether the situation as revealed by the trend percents appears to be favorable or unfavorable. Trend Percent for Net Sales: Numerator: Denominator: Trend percent 2021: % 2020: % 2019: % %3D 2018: % = 2017: % Is the trend percent for Net Sales favorable or unfavorable? Trend Percent for Cost of Goods Sold: Numerator: Denominator: Trend percent %3D 2021: % 2020: % 2019: % %3D 2018: % = 2017: %3D Is the trend percent for Cost of Goods Sold favorable or unfavorable? Trend Percent for Accounts Receivable: Numerator: Denominator: Trend percent %3D 2021: % 2020: % %3D 2019: % = 2018: % 2017: % %3D Is the trend percent for Accounts Receivable favorable or unfavorable? II II IL || II

Sales Cost of goods sold Gross profit Operating expenses Income from operations Interest expense Income before income tax Income tax expense Net income (a) 2021 $1,595 900 695 524 171 80 Your answer is incorrect. 91 25 $66 2020 $1,387 $1,208 743 644 411 233 50 183 2019 46 596 612 402 210 40 170 43 $137 $127 Using horizontal analysis, calculate the horizontal percentage of a base-year amount, assuming 2019 is the base year. (Round answers to 1 decimal place, e.g. 5.2%. Enter negative amounts using either a negative sign preceding the number e.g. -45.1% or parentheses e.g. (45.1) %.)

Zebra Company reports the following figures for the years ending December 31, 2019 and 2018:   　  2019   2018   Net Sales   $65,000   $40,000   Cost of Goods Sold   42,000   31,000   Gross Profit   $23,000   $9,000   What are the percentage changes from 2018 to 2019 for Net Sales, Cost of Goods Sold and Gross Profit, respectively? (Round your final answers to one decimal place, X.X%)   A. 100%, 155.6%, 35.5%   B. 62.5%, 35.5%, 155.6%   C. 100%, 0.7%, 0.4%   D. 155.6%, 62.5%, 35.5%

Selected comparative financial statements of Korbin Company follow. KORBIN COMPANY Comparative Income Statements For Years Ended December 31 2021 2020 2019 Sales $ 429,809 $ 329,269 $ 228,500 Cost of goods sold 258,745 207,439 146,240 Gross profit 171,064 121,830 82,260 Selling expenses 61,033 45,439 30,162 Administrative expenses 38,683 28,976 18,966 Total expenses 99,716 74,415 49,128 Income before taxes 71,348 47,415 33,132 Income tax expense 13,271 9,720 6,726 Net income $ 58,077 $ 37,695 $ 26,406 KORBIN COMPANY Comparative Balance Sheets December 31 2021 2020 2019 Assets Current assets $ 58,039 $ 38,846 $ 51,928 Long-term investments 0 1,100 3,100 Plant assets, net 106,146 96,441 57,969 Total assets $ 164,185 $ 136,387 $ 112,997 Liabilities and Equity Current liabilities $ 23,971 $ 20,322 $ 19,774 Common stock 67,000 67,000 49,000 Other paid-in capital 8,375 8,375 5,444 Retained earnings 64,839 40,690 38,779 Total liabilities and equity $ 164,185 $ 136,387 $…

Sales Cost of goods sold Accounts receivable Numerator: 2021 $ 511,648 253,158 24,815 Numerator: Compute trend percents for the above accounts, using 2017 as the base year. For each of the three accounts, state whether the situation as revealed by the trend percents appears to be favorable or unfavorable. 2020 $ 332,239 164,397 19,403 1 1 1 2021: 2020: 2019: 2018: 2017: Is the trend percent for Net Sales favorable or unfavorable? Numerator: Trend Percent for Net Sales: 2019 $ 272,327 136,740 18,573 1 1 1 1 Denominator: Trend Percent for Cost of Goods Sold: 1 Denominator: 1 1 1 / 1 1 2021: 2020: 2019: 2018: 2017: Is the trend percent for Cost of Goods Sold favorable or unfavorable? Trend Percent for Accounts Receivable: Denominator: 1 1 2021: 1 2020: 1 2019: 1 2018: 1 2017: 1 Is the trend percent for Accounts Receivable favorable or unfavorable? 2018 $ 200,979 99,730 11,757 = = = = = = = = = = = = = = = 2017 $ 146,700 71,883 10,064 = Trend percent Trend percent Trend percent % % % % % %…

LOGIC COMPANY Comparative Income Statement For Years Ended December 31, 2019 and 2020 2020 2019 Gross sales $20,600 $16,200 Sales returns and allowances 800 100 Net sales $19,800 11,600 $ 8,200 $16,100 8,600 $ 7,500 Cost of merchandise (goods) sold Gross profit Operating expenses: Depreciation Selling and administrative Research Miscellaneous Total operating expenses Income before interest and taxes Interest expense 860 680 3,400 2,800 710 580 520 380 sa $5,490 $ 2,710 $ 4,440 $ 3,060 720 580 Income before taxes $ 1,990 $2,480 992 Provision for taxes 796 Net income $ 1,194 $ 1,488 LOGIC COMPANY Comparative Balance Sheet December 31, 2019 and 2020 2020 2019 Assets Current assets: Cash Accounts receivable Merchandise inventory Prepaid expenses Total current assets Plant and equipment: Building (net) $12,800 17,300 9,300 24,800 $64, 200 $ 48, 700 $ 9,800 13,300 14,800 10,800 $15,300 14,300 $11, 800 9,800 Land acer Σ %24 %24

Sales Cost of goods sold Accounts receivable 2021 $ 676,574 333,971 32,679 2020 $ 439,334 216,824 25,657 2019 $ 340,569 170,229 23,363 2018 $ 237,330 117,892 13,860 2017 $ 175,800 86,142 12,060 Compute trend percents for the above accounts, using 2017 as the base year. For each of the three accounts, state whether the situation as revealed by the trend percents appears to be favorable or unfavorable. 2021: 2020: 2019: 2018: 2017: Trend Percent for Net Sales: Numerator: Denominator: = Trend percent = % Is the trend percent for Net Sales favorable or unfavorable? 2021: 2020: 2019: 2018: 2017: Trend Percent for Cost of Goods Sold: Numerator: Denominator: Trend percent Is the trend percent for Cost of Goods Sold favorable or unfavorable? %

Jaran Enterprises Income Statement For the year ended December 31, 2021 Sales Less: Cost of Sales Gross Profit Less: Operating Expenses Net Income Jaran Enterprises Comparative Balance Sheet As of December 31, 2021 2018 P 11,792,000 6,650,000 5,142,000 2,260,000 P 2,882,000 2017 P 33,000 Cash P 593,200 Accounts Receivables 428,000 ? Merchandise Inventory ? 413,000 14,000 51,000 Office Supplies Prepaid Insurance 46,000 48,000 Property, Plant and Equipment 3,540,800 3,540,000 Total Assets P 5,019,000 P ? Accounts Payable P 517,000 P 108,000 Salaries Payable 51,000 0 0 Mortgage Payable Share Capital 1,500,000 2,600,000 1,500,000 69,000 Retained Earnings 2,951,000 Total Liabilities and Equity P? P 4,277,000 Based on the above information, determine the debt ratio, acid test ratio, and return on assets for the year 2021. Round off to two decimal places.

LOGIC COMPANY     Comparative Income Statement     For Years Ended December 31, 2017 and 2018                       2018 2017   Gross sales $ 22,400   $ 17,550     Sales returns and allowances   800     100     Net sales $ 21,600   $ 17,450     Cost of merchandise (goods) sold   11,150     7,900     Gross profit $ 10,450   $ 9,550     Operating expenses:               Depreciation $ 1,040   $ 770     Selling and administrative   4,750     3,700     Research   890     670     Miscellaneous   700     470     Total operating expenses $ 7,380   $ 5,610     Income before interest and taxes $ 3,070   $ 3,940     Interest expense   900     670     Income before taxes $ 2,170   $ 3,270     Provision for taxes   868     1,308     Net income $ 1,302   $ 1,962         LOGIC COMPANY     Comparative Balance Sheet     December 31, 2017 and 2018                   2018 2017   Assets               Current assets:               Cash $ 11,800…

LOGIC COMPANY     Comparative Income Statement     For Years Ended December 31, 2017 and 2018                       2018 2017   Gross sales $ 22,400   $ 17,550     Sales returns and allowances   800     100     Net sales $ 21,600   $ 17,450     Cost of merchandise (goods) sold   11,150     7,900     Gross profit $ 10,450   $ 9,550     Operating expenses:               Depreciation $ 1,040   $ 770     Selling and administrative   4,750     3,700     Research   890     670     Miscellaneous   700     470     Total operating expenses $ 7,380   $ 5,610     Income before interest and taxes $ 3,070   $ 3,940     Interest expense   900     670     Income before taxes $ 2,170   $ 3,270     Provision for taxes   868     1,308     Net income $ 1,302   $ 1,962         LOGIC COMPANY     Comparative Balance Sheet     December 31, 2017 and 2018                   2018 2017   Assets               Current assets:               Cash $ 11,800…