Midterm_Exam_Answer_Sheet

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Compare the Solvency, Liquidity and Profitability for the two companies

TEST YOUR UNDERSTANDING A Review of Ratio Analysis Activity 10 Y ORACLE CORPORATION Ear the fiscal year ended. Current ratio 5/31/97 5/31/98 1.74 5/31/99 (PAL/S) 1.79 1.70 (P/L/S) Debt ratio 0.491 0.492 0.488 (P/L/S) Return on sales 0.15 0.11 ´ 0.14 (РLIS) Return on assets 0.18 0.14 0.18 Source: Disclosure, Ina, Compact D/SEC, 2000. 1. In the left-hand margin above, circle whether the ratio measures (P)rofitability, short-term (L)iquidity - the ability to pay current debt, or long-term (S)ölvency - the ability to pay long-term debt. 2. For each short-term liquidity ratio above, circle the ratio indicating the greatest ability to pay current liabilities for the `three years of information presented. This company appears to (have / not have) the ability to pay current debt. 3. For each long-term solvency ratio above, circle the ratio indicating the least amount of debt financing for the three years of information presented. This company relies more heavily on (debt / equity) to finance…

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Problem 6. VSB Enterprise has 3 items in its current assets section of the balance sheet; cash, AR and inventory. Given is the following information: Credit sales Inventory turnover Working capital Current ratio 75% of total sales 5x P1 120 000 2:1 What is the amount of inventory? Quick ratio Average collection period Working days 1.25:1 42 days 360

Financial Accounting Question Solve Please

Ratios Calculated Year 1 Year 2 3.64 +Q+ Price-to-cash-flow 5.20 Inventory turnover 10.40 Debt-to-equity 0.70 8.32 0.56 Year 3 2.91 6.66 0.45 Based on the preceding information, your calculations, and your assumptions, which of the following statements can be included in your analysis report? Check all that apply. Cold Goose Metal Works Inc.'s ability to meet its debt obligations has improved since its debt-to-equity ratio decreased from 0.70 to 0.45. A decline in the inventory turnover ratio can be explained by the new Inventory management system that the company recently adopted, which led to more efficient inventory management. A decline in the debt-to-equity ratio implies a decline in the creditworthiness of the firm. A plausible reason why Cold Goose Metal Works Inc.'s price-to-cash-flow ratio has decreased is that investors expect lower cash flow per share in the future.

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Ratio Industry Ratios GnG Ratios 1. Current Ratio 5.3   2. Acid Test Ratio 5.1   3. Gross Profit Ratio 30%   4. Net Income Margin 7.5%   5. Receivable Turnover Ratio 9   6. Return on Asset Ratio 12%   7. Debt to Asset Ratio 1:4     Interpretation and verbal analysis compared to industry ratios: 1. Liquidity   2. Profitability   3. Solvency   Computations:

Consider this simplified balance sheet for Geomorph Trading: Current assets Long-term assets $ 245 Current liabilities Long-term debt 630 Other liabilities Equity $ 875 Required: a. What is the company's debt-equity ratio? (Hint: debt = Current liabilities, Long-term debt, and Other liabilities) Note: Round your answer to 2 decimal places. b. What is the ratio of total long-term debt to total long-term capital? Note: Round your answer to 2 decimal places. c. What is its net working capital? d. What is its current ratio? Note: Round your answer to 2 decimal places. $ 170 215 140 350 $ 875 a Debt-equity ratio b. Long-term debt-to-capital ratio c. Net working capital d. Current ratio

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C. Comparative Financial data for the two companies are shown below: Cash Accounts Receivable Inventories Prepaid Expenses Other Assets (net) Current Liabilities Mortgage Payable Owner's Equity Sales (all on credit) Gross Profit rate on Sales Number of Business days, 360 TIKTAK CORP. P67,832 a. Inventory Turnover b. Average age of inventory c. Accounts receivable turnover 84,480 71,280 12,000 353,388 126,694 50,000 412,286 844,800 32.5% METATA CORP. P 17,100 27,600 26,496 3,000 173,124 48,392 100,000 98,928 165,600 20% Required: 1. Determine which of the two companies has the more liquid current assets by developing the following ratios: d. Average collection period 2. Determine which of the two companies has the more total liquid assets. 3. Determine which of the two companies is generally more stable.

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Plz help, 2 different problems

a. Current ratiob. Inventory Turnover ratioc. Accounts receivable ratiod. Fixed asset turnover ratioe. Net profit marginf. Return of assets (ROA)g. Return of equity (ROE)

I need help in part a; please explain me in steps. thanks

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) Ratio Current ratio Accounts receivable turnover Average collection period Inventory turnover Days in inventory Profit margin Asset turnover Return on assets Return on common stockholders' equity Debt to assets ratio Times interest earned Free cash flow Target 1.45 8.6 times FOOOOOOOO :1 42.6 days times days % times % % % times $ Walmart 0.86 :1 107.6 times 3.4 days OOOOOOOOO times days % times % % % times

What company is better in the short term investment

Comprehensive Ratio Analysis Data for Lozano Chip Company and its industry averages follow. Lozano Chip Company: Balance Sheet as of December 31, 2019 (Thousands of Dollars) Cash $ 240,000 Accounts payable $ 600,000 Receivables 1,575,000 Notes payable 100,000 Inventories 1,135,000 Other current liabilities 560,000 Total current assets $2,950,000 Total current liabilities $1,260,000 Net fixed assets 1,315,000 Long-term debt 400,000 Common equity 2,605,000 Total assets $4,265,000 Total liabilities and equity $4,265,000 Lozano Chip Company: Income Statement for Year Ended December 31, 2019 (Thousands of Dollars) Sales $7,500,000 Cost of goods sold 6,375,000 Selling, general, and administrative expenses 943,000 Earnings before interest and taxes (EBIT) $ 182,000 Interest expense 40,000 Earnings before taxes (EBT) $ 142,000 Federal and state income taxes (25%) 35,500 Net income $ 106,500 a. Calculate the indicated ratios for Lozano. Do not round intermediate calculations. Round your answers…

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