Finance report - Hire Performance Tire by Group 5

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Apr 3, 2024

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Financial Report - Hire Performance Tire Submitted to – Umar Minhas Date – 14 th August 2023 By Group 5  Nidhi Alagichi  Dipti Senapati  Shania Renee Rodrigues  Harmeet Singh  Pranavsinh Chouhan

Contents Financial Report - Hire Performance Tire .............................. 1 Executive Summary ................................................................... 2 Introduction ................................................................................ 3 Qualitative & Quantitative Analysis ........................................ 4 Recommendation ..................................................................... 14 Conclusion ................................................................................ 16 Appendices ................................................................................ 17

Executive Summary The Wallace family founded High-Performance Tire (HPT) Ltd., which is currently facing significant financial and operational challenges. Recent data indicates a decline in profitability, pressing liquidity concerns, and ineffective asset and inventory management despite its longstanding market presence. In addition, the company's growing debt is becoming increasingly worrisome. To overcome these obstacles, HPT must conduct a comprehensive review of its operational expenses, reconsider its inventory strategies, optimize its asset utilization, and possibly contemplate debt restructuring. Increasing shareholder value should be their primary objective. To ensure a brighter future, HPT could also benefit from evaluating potential leadership transitions and pursuing strategic alliances or mergers.

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Introduction High-Performance Tire (HPT) Ltd., a retail tire chain founded by Harry and Edna Wallace in 1952, is at a crossroads. Jane Wallace's son, William Wallace, recently led the company through operational and financial challenges. The company grew initially under Jane Wallace's stewardship. The case study offers a comprehensive review of HPT's historical development, recent growth and diversification strategy, and the resulting challenges, especially those that arose during William's tenure as manager. This report examines the factors that have contributed to HPT's declining performance and suggests its possible revival and future management strategy. The reader will acquire an understanding of the managerial decisions made, their financial repercussions, and the consequences for family-owned businesses in the competitive retail tire sector.

Qualitative & Quantitative analysis 1. Profitability - GROSS PROFIT MARGIN: HPT had a gross profit margin of 40% in 2001, decreasing to 39% in 2002, and maintaining at 39% in 2003, compared to the industry average of 42%. Despite incurring substantial debt and costs, this margin has remained relatively stable, indicating the company's ability to manage its direct costs. However, it remains below the industry average. - OPERATING PROFIT MARGIN : HPT's operating profit margin was at 11.09% in 2001, which then reduced to 8.83% in 2002 and further decreased to 5.53% in 2003. In comparison, the industry average stands at 12%. This decreasing trend signals that the company's operating expenses are significantly high, affecting its profitability and potentially its financial stability. - NET PROFIT MARGIN: HPT's net profit margin was 5.90% in 2001, dropped to 3.56% in 2002, and drastically declined to 0.25% in 2003. This is in contrast to the industry average of 6.71%. Despite increasing sales, higher expenses are eroding the company's net profits, emphasizing the need for cost optimization. 2. Liquidity - CURRENT RATIO:

The industry average for the current ratio is 1.90. HPT's current ratio has been on a decline since 2001, moving from 1.88 in 2001 to 1.36 in 2002 and further dropping to 0.93 in 2003. This downtrend, especially being below the industry average, indicates potential liquidity risks for the company soon. - CASH RATIO: The cash ratio represents the proportion of a company's current liabilities that can be covered by its most liquid assets. HPT's cash ratio has been consistently below the industry benchmark of 0.51: from 0.38 in 2001, it decreased to 0.16 in 2002 and further declined to 0.04 in 2003. This poses significant liquidity risks, suggesting the company should prioritize boosting its cash reserves and managing its current liabilities. 3. Asset Management - INVENTORY TURNOVER IN DAYS : With an industry standard at 60 days, HPT's inventory turnover was considerably longer. It stood at 81 days in 2003, improved to 68 days in 2002, but reverted to 81 days in 2003. This extended turnover period implies slower sales or potential overstocking issues compared to its competitors. - FIXED ASSETS TURNOVER RATIO: This ratio showcases the company's ability to generate revenue from its fixed assets. While the industry average is 3.19, HPT generated $2.5 in 2002 and only $1.7 in 2003 for every dollar invested in fixed assets. This indicates inefficiencies in utilizing its long-term assets to generate sales.

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- TOTAL ASSETS TURNOVER RATIO: This metric compares a company's sales to its total assets. The industry standard is 2 times. For HPT, this ratio was 1.80 in 2002 and decreased to 1.31 in 2003, indicating a less efficient use of assets compared to the industry. 4) Long-term Debt Paying Ability - DEBT RATIO: The debt ratio gives an idea of the company's leverage, with the industry average being 35%. HPT's debt ratio increased substantially from 17.64% in 2001, to 42.63% in 2002, and then 53.34% in 2003. This sharp rise signals that HPT is becoming more reliant on debt financing. - DEBT TO EQUITY RATIO: The higher the ratio, the more the company relies on debt to finance its activities. The industry average stands at 2.5. HPT has shown a significant increase from 1.54 in 2001 to 2.53 in 2002, and a concerning 4.04 in 2003. This suggests that equity holders in HPT might be at risk if the company cannot meet its obligations. 5) Profitability in Relation to Investment - RETURN ON ASSETS (ROA): This ratio gives an idea of how well management is employing the company's total assets to make a profit. The industry standard for ROA is 7%. HPT started strong with 10.17% in 2001, saw a decrease to 5.15% in 2002, and then had a significant drop to 0.27% in 2003. This decline indicates challenges in asset management or profitability.

- RETURN ON EQUITY (ROE): ROE measures how much profit a company generates with the money shareholders have invested. The industry average is around 12%. HPT reported a substantial decline from 15.65% in 2001 to 13.19% in 2002, and then to just 1.09% in 2003. This indicates that shareholder returns have diminished considerably, which could lead to concerns among investors.

Horizontal Analysis of Income Statement Income Statement Particulars 2003 2002 2001 2003 2002 Amount (Increase/ Decrease) Percentage Amount (Increase/ Decrease) Percenta ge Sales $6,500,000 $550,000 $4,050,000 $950,000 17.12 $1,500,00 0 37.04 Cost of Goods Sold $3,965,000 $3,385,50 0 $2,430,000 $579,500 17.12 $955,500 39.32 Gross Profit $2,535,000 $2,164,50 0 $1,620,000 $370,500 17.12 $544,500 33.61 Depreciation $485,600 $287,200 $158,500 $198,400 69.08 $128,700 81.20 Other Operating Expenses $1,690,000 $1,387,50 0 $1,012,500 $302,500 21.80 $375,000 37.04 Earnings Before Interest and Taxes $359,400 $489,800 $449,000 $(130,400 ) -26.62 $40,800 9.09 Interest $331,956 $160,125 $50,645 $171,831 107.31 $109,480 216.17 Earnings Before Taxes $27,444 $329,675 $398,355 $(302,231 ) -91.68 $(68,680) -17.24 Income Taxes $10,978 $131,870 $159,342 -91.68 $(27,472) -17.24

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$(120,892 ) Net Income $16,467 $197,805 $239,013 $(181,338 ) -91.68 $(41,208) -17.24  Sales: Over the past three years, sales have steadily climbed, with 2001–2002 seeing the biggest jump.  Cost of Goods Sold: Year-over-year increases in the cost of goods sold influence gross profit margins.  Sales - Sales rose, but gross profit grew more slowly because the cost of products sold went up.  Depreciation: Depreciation costs increased significantly, especially between 2001 and 2002.  Other Operating Expenses: Other operating expenses rose annually, reducing overall profits.  Earnings Before Interest and Taxes (EBIT): In 2003, EBIT fell as a result of escalating interest costs, which hurt profitability.  Interest: Earnings before taxes were impacted by a significant increase in interest expenses.  Net Income : Due to less revenue before taxes and greater interest and tax charges, net income has continually declined. In conclusion, the business struggled to control costs, particularly the rising cost of goods sold and interest costs, which over time resulted in declining profitability. To address the fundamental reasons and devise solutions to reduce these issues, more investigation would be required.

Horizontal Analysis of Balance Sheet Balance Sheet Particulars 2003 2002 2001 2003 2002 Amount (Increase/ decrease) percentage Amount (Increase/ Decrease) Percentage Cash $57,000 $110,000 $155,000 -$53,000 -$48.18 -$45,000 -$29.03 Accounts Receivable $95,000 $59,000 $45,000 $36,000 $61.02 $14,000 $31.11 Inventories $1,050,000 $723,000 $540,000 $327,000 $45.23 $183,000 $33.89 Prepaid Expenses $42,000 $36,000 $25,000 $6,000 $16.67 $11,000 $44.00 Total Current Assets $1,244,000 $928,000 $765,000 $316,000 $34.05 $163,000 $21.31 Property, Plant and Equipment $7,288,800 $4,819,200 $3,245,000 $2,469,60 0 $51.25 $1,574,200 $48.51 Less: Accumulative Depreciation $2,432,800 $1,947,200 $1,660,000 $485,600 $24.94 $287,200 $17.30 Net Property, Plant and Equipment $4,856,000 $2,872,000 $1,585,000 $1,984,00 0 $69.08 $1,287,000 $81.20 Total Assets $6,100,000 $3,800,000 $2,350,000 $2,300,00 0 $60.53 $1,450,000 $61.70 Accounts Payable $440,556 $165,000 $99,000 $275,556 $167.00 $66,000 $66.67 Line of Credit $570,638 $353,000 $267,435 $217,638 $61.65 $85,565 $31.99 Current Portion of Long-term Debt $325,346 $162,000 $41,461 $163,346 $100.83 $120,539 $290.73 Total Current Liabilities $1,336,540 $680,000 $407,895 $656,540 $96.55 $272,105 $66.71 Long-term Debt $3,253,460 $1,620,000 $414,605 $1,633,46 0 $100.83 $1,205,395 $290.73

Equity $1,510,000 $1,500,000 $1,527,500 $10,000 $0.67 -$27,500 -$1.80 Total Liabilities and Equity $6,100,000 $3,800,000 $2,350,000 $2,300,00 0 $60.53 $1,450,000 $61.70  Over time, the company's assets, notably its property, plant, and equipment, have increased, signaling prospective growth or investment.  Both accounts receivable and inventory have significantly increased, which can be a sign of increasing production or sales activity.  The company's financial burden and capacity to meet its debt commitments may come under scrutiny due to the increase in liabilities, particularly long-term debt, and accounts payable.  The dependence on the line of credit and rising long-term debt point to a requirement for outside funding.  The minor drop in equity could be brought about by a number of things, such as net income, dividend payments, or adjustments to reserves. Vertical Analysis of Income Statement

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Income Statement For Year Ending December 31 Common-size percentage 2003 2002 2001 2003 2002 2001 Sales $6,500,000 $5,550,000 $4,050,000 100 100 100 Cost of Goods Sold $3,965,000 $3,385,500 $2,430,000 61.00 61.00 60.0 0 Gross Profit $2,535,000 $2,164,500 $1,620,000 39.00 39.00 40.0 0 Depreciation $485,600 $287,200 $158,500 7.47 5.17 3.91 Other Operating Expenses $1,690,000 $1,387,500 $1,012,500 26.00 25.00 25.0 0 Earnings Before Interest and Taxes $359,400 $489,800 $449,000 5.53 8.83 11.0 9 Interest $331,956 $160,125 $50,645 5.11 2.89 1.25 Earnings Before Taxes $27,444 $329,675 $398,355 0.42 5.94 9.84 Income Taxes $10,978 $131,870 $159,342 0.17 2.38 3.93 Net Income $16,467 $197,805 $239,013 0.25 3.56 5.90 A few interesting trends are revealed by the common-size percentage analysis of the revenue statements for 2003, 2002, and 2001. Over the course of the three years, sales grew steadily, with an astounding 37% jump in 2002 compared to 2001. However, as a percentage of sales, the cost of goods sold remained comparatively consistent, demonstrating careful cost control. Despite the rise in sales, gross profit margins held stable at roughly 39%. From 2001 to 2002, depreciation costs increased significantly, indicating capital asset investments. Earnings before interest and taxes (EBIT), which reached 5.53% in 2003, significantly dropped during the three years. This decline could be attributable to rising interest costs, which decreased profitability by increasing from 1.25% in 2001 to 5.11% in 2003.

Despite the drop in EBIT, the business was able to keep income tax costs under control, resulting in relatively consistent net income as a percentage of sales. The report emphasizes how crucial it is to keep an eye on spending and interest rates to preserve a healthy bottom line. Vertical Analysis of Balance Sheet Balance Sheet Common-size percentage 2003 2002 2001 2003 2002 2001 Assets Cash $57,000 $110,000 $155,000 0.93 2.89 6.60 Accounts Receivable $95,000 $59,000 $45,000 1.56 1.55 1.91 Inventories $1,050,000 $723,000 $540,000 17.21 19.03 22.98 Prepaid Expenses $42,000 $36,000 $25,000 0.69 0.95 1.06 Total Current Assets $1,244,000 $928,000 $765,000 20.39 24.42 32.55 Property, Plant and Equipment $7,288,800 $4,819,200 $3,245,000 119.49 126.82 138.09 Less: Accumulative Depreciation $2,432,800 $1,947,200 $1,660,000 39.88 51.24 70.64 Net Property, Plant and Equipment $4,856,000 $2,872,000 $1,585,000 79.61 75.58 67.45 Total Assets $6,100,000 $3,800,000 $2,350,000 100 100 100 Liabilities and shareholders equity Accounts Payable $440,556 $165,000 $99,000 7.22 4.342105 4.21 Line of Credit $570,638 $353,000 $267,435 9.35 9.289474 11.38 Current Portion of Long- term Debt $325,346 $162,000 $41,461 5.33 4.263158 1.76 Total Current Liabilities $1,336,540 $680,000 $407,895 21.91 17.89474 17.36

Long-term Debt $3,253,460 $1,620,000 $414,605 53.34 42.63158 17.64 Equity $1,510,000 $1,500,000 $1,527,500 24.75 39.47368 65.00 Total Liabilities and Equity $6,100,000 $3,800,000 $2,350,000 100 100 100  Several important patterns are revealed by the balance sheet's common-size percentage analysis for 2003, 2002, and 2001. As a percentage of total assets, cash decreased, possibly signaling problems with cash management.  The small increase in accounts receivable as a percentage of assets suggests that credit practices have changed.  The proportional rise in inventory levels could be a symptom of difficulties with inventory management.  Prepaid costs remained largely constant. Increasing investments in tangible assets are shown by the percentage increase in property, plant, and equipment.  Accounts payable and credit increased in relation to total liabilities and equity on the liability side, indicating a greater reliance on external funding.  A rise in the ratio of current debt to long-term debt may be a sign of increased short-term debt commitments and debt dependency. The equity ratio dropped, reflecting changes in the capital structure.

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Cash Flow Statement for 2002 and 2003 Cash Flow Statement Particulars 2002 2003 Operating Activities Net Income before Preferred Dividends 197,805.00 16,467.00 Non-cash Adjustments Depreciation 287,200.00 485,600.00 Working Capital Adjustments Increase in Accounts Receivable (14,000.00) (36,000.00) Increase in Inventory (183,000.00) (327,000.00) Increase in Prepaid Expenses (11,000.00) (6,000.00) Increase in Accounts Payable 66,000.00 275,556.00 Net Cash from Operating Activity 343,005.00 408,623.00 Investing Activities Change in Net Property, Plant & Equipment (1,574,200.00) (2,469,600.00) Net Cash from Investing Activity (1,574,200.00) (2,469,600.00) Financing Activities Line of Credit 85,565.00 217,638.00 Long-term Debts 1,325,935.00 1,796,806.00 Dividends (225,305.00) (6,467.00) Net Cash from Financing Activity 1,186,195.00 2,007,977.00 Net Decrease in cash $ (45,000) $ (53,000) Beginning Cash balance 155,000.00 110,000.00 Ending Cash balance 110,000.00 57,000.00  The presented cash flow statement for the years 2002 and 2003 offers important insights into the financial dynamics of the organization.  Positive trends were observed in operating activities, with net cash created increasing from $343,005 to $408,623, which reflected improved core business performance.  The increase in the outflow of investing activities from -$1,574,200 to -$2,469,600 highlights large investments in property and machinery. Strong cash inflow was demonstrated by

financing activities, which climbed from $1,186,195 to $2,007,977 principally as a result of increased borrowing.  However, the sharper net cash decline—from $45,000 to $53,000—and the shrinking ending cash balance—from $155,000 to $57,000—emphasize the importance of careful cash management and wise investment choices.  To ensure operational stability and financial health, the company should regularly manage its capital expenditures and strike a balance between debt financing and sustainable cash generation. Recommendation Several major suggestions may be made based on the complete study of HPT's financial condition. 1. Operational Efficiency: Given the ongoing fall in operating profit margins, HPT must examine its operational expenditure and identify cost-cutting opportunities. Streamlining processes, renegotiating contracts, and pursuing bulk-buying discounts may all assist to increase the operational profit margin. 2. Liquidity and Cash Management: Given the company's diminishing cash reserves and worsening current and cash ratios, HPT should prioritize cash reserve development. To boost cash or minimize current obligations, the corporation may explore asset liquidation or divestment. This will act as a buffer during economic downturns and guarantee that they can satisfy their short-term commitments. 3. Inventory Management: If the company's inventory turnover is slower than the industry average, it may be retaining extra goods or not selling as effectively as its rivals. HPT must prioritize demand forecasts and adjust inventory levels appropriately. Furthermore, adopting appealing sales methods and partnerships might increase sales, lowering inventory days.

4. Asset use: Poor performance in fixed asset and total asset turnover ratios indicates inefficient asset use. HPT should conduct a complete asset analysis and sell or lease out unused assets. 5. Debt Management: HPT's expanding debt profile is concerning, particularly given its increasing debt ratio and extended accounts payable turnover ratio. The corporation should prioritize debt restructuring, either refinancing at better terms or leveraging equity capital. Furthermore, maintaining strong connections with suppliers and making regular payments might help to restore confidence in the business. 6. Shareholder Value: The falling ROE and ROA ratios show that shareholder value is declining. To provide a greater return to its stakeholders, management must revise its plan. Furthermore, clear communication regarding the company's strategic intentions might help to reestablish investor trust. 7. Long-term Strategic Decision: Given the complexities of the situation, HPT should evaluate prospective merger or acquisition alternatives. Collaboration with a financially stronger firm may provide the necessary finance and management knowledge. Furthermore, if internal management continues to struggle, contemplating a change in leadership or bringing in outside specialists may assist the organization in navigating these problems. Conclusion

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High-Performance Tire Ltd., a long-standing Wallace family business, is experiencing serious operational and financial issues. Despite maintaining its gross profit margin, the company has inefficiencies in operations, liquidity, inventory, and asset usage, as well as a worrying debt profile. To solve these challenges, immediate action is required. Strategic alliances, such as mergers and acquisitions, may provide an advantageous route ahead. Communication with stakeholders must be open and honest. The firm has the ability to restore its industry prominence with the appropriate strategy and leadership, building on the foundation set by its founders. Appendices FINANCIAL RATIOS

LIQUIDITY Current Ratio = Current Assets Current Liabilities Particulars 2003 2002 2001 Current Ratio =1244000/1336540 = 0.93 =928000/680000 =1.36 =765000/407895 =1.88 Quick Ratio = Current Assets – Inventories – Prepaid Expenses Current Liabilities Particulars 2003 2002 2001 Quick Ratio = (1244000-1050000- 42000) /1336540 = 0.11 =(928000-723000- 36000)/680000 =0.25 =(765000-540000- 25000)/407895 = 0.49 Cash Ratio = Cash Current Liabilities Particulars 2003 2002 2001 Cash Ratio =57000/1336540 = 0.04 =110000/680000 = 0.16 =155000/407895 = 0.38 Net Working Capital = Current Assets - Current Liabilities Particulars 2003 2002 2001 NWC =1244000-1336540 = - 92,540 =928000-680000 = 248,000 =765000-407895 = 357,105

Net Working Capital to Total Assets = Net Working Capital Total Assets Particulars 2003 2002 2001 Net Working Capital to Total Assets =-92540/6100000 = -0.02 =248000/3800000 = 0.07 =357105/2350000 = 0.15 ASSET MANAGEMENT A/R Turnover = Net Credit Sale Average Account Receivable Particulars 2003 2002 Average Account Receivable =(95000+59000)/2 = 77,000 =(45000+59000)/2 = 52,000 Accounts Receivable Turnover =365/84.42 =4.32 = 4 Days =365/106.73 =3.42 = 3 Days A/R Turnover In Days = 365 AR Turnover Particulars 2003 2002 AR TURNOVER IN DAYS =365/4.48 = 81.47 = 81 Days =365/5.36 = 68.10 = 68 Days Inventory Turnover = Cost of Goods Sold Average Inventories Particulars 2003 2002 Avg Inventory =(1050000+723000)/2 =(723000+540000)/2

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= 886,500 = 631,500 Inventory Turnover =(3965000/886500) = 4.47 =(3385500/631500) = 5.36 Inventory Turnover in days = 365 Inventory Turnover Particulars 2003 2002 INVENTORY TURNOVER IN DAYS =365/4.48 = 81.47 Days =365/5.36 = 68.10 Days Operating Cycle = Inventory Turnover In Days + AR Turnover in days Particulars 2003 2002 Operating Cycle =81+4 =85 Days =68+3 71 Days AP Turnover = Cost of Goods Sold Average Accounts Payable Particulars 2003 2002 Average Accounts Payable =(440556+165000)/2 =302,778 =(99000+165000)/2 =132,000 AP Turnover =3965000/302778 =13.10 =3385500/132000 =25.65 A/P Turnover In Days = 365 AP Turnover Particulars 2003 2002

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AP TURNOVER IN DAYS =365/13.1 =27.86 = 28 Days =365/25.65 =14.23 = 14 Days Cash Conversion Cycle = Inventory Turnover In Days – A/P Turnover in days + A/R Turnover in Days Particulars 2003 2002 Cash Conversion Cycle =81-28+4 = 57 Days =68-14+3 = 57 Days NWC Turnover = Net Sales Average Net Working Capital Particulars 2003 2002 Average Net Working Capital =(248000+-92540)/2 = 77,730 =(248000+357105)/2 =302,552.50 NWC Turnover =6500000/77730 =83.62 =5550000/302552.5 =18.34 Fixed Assets Turnover = Net Sale Average Capital Assets Particulars 2003 2002 Average Net Fixed Assets =(2872000+4856000)/2 =3,864,000 =(1585000+2872000)/2 =2,228,500 Fixed Assets Turnover =6500000/3864000 =1.7 =5550000/2228500 =2.5 Total Assets Turnover = Net Sales Average Total Assets

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Particulars 2003 2002 Average Total Assets =(3800000+6100000)/2 =4,950,000 =(2350000+3800000)/2 =3,075,000 Total Assets Turnover =6500000/4950000 =1.31 =5550000/3075000 =1.80 LONG-TERM DEBT PAYING ABILITY Leverage Ratios Debt Ratio = Total Debt Total Assets Particulars 2003 2002 2001 Debt Ratio =3253460/6100000 =53.34% =1620000/3800000 = 42.63% =414605/2350000 = 17.64% LT Debt to Total Capitalization = LT Debt LT Liabilities + Equity Particulars 2003 2002 2001 LT Debt to Total Capitalization =3253460/4763460 =0.68 =1620000/3120000 =0.52 =414605/1942105 =0.21 Debt Equity Ratio = Total Liabilities Total Equity Particulars 2003 2002 2001 Debt Equity Ratio =6100000/1510000 =4.04 =3800000/1500000 =2.53 =2350000/1527500 =1.54

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Coverage Ratios Times Interest Earned = EBIT Interest Expense Particulars 2003 2002 2001 Times Interest Earned =359400/331956 =1.08 =489800/160125 =3.06 =449000/50645 =8.87 Cash Flow Coverage = EBIT + Lease Expense + Depreciation Lease Expense +Interest Exp +Preferred Dividend/(1-t) +Principal Payment/ (1-t) Particular s 2003 2002 2001 Cash Flow Coverage =(359400+485600)/ 331956 =2.55 =(489800+287200)/ 160125 =4.85 =(449000+158500)/ 50645 =12 Effective Interest Rate = Interest Rate Total Interest – Bearing Debt Particulars 2003 2002 2001 Effective Interest Rate =331956/ (3253460+1510000) =0.07 =160125/ (1620000+1500000) =0.05 =160125/ (1620000+1500000) =0.03 PROFITABILITY

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In Relation to Sales Gross Profit Margin = Gross Profit Net Sales Particulars 2003 2002 2001 Gross Profit Margin =2535000/6500000 =39% =2164500/5550000 =39% =1620000/4050000 =40% Operating Profit Margin = Operating Income Net Sales Particulars 2003 2002 2001 Operating Profit Margin =359400/6500000 =5.53% =489800/5550000 =8.83% =449000/4050000 =11.09% Net Profit Margin = Net Income Net Sales Particulars 2003 2002 2001 Net Profit Margin =16467/6500000 =0.25% =197805/5550000 =3.56% =239013/4050000 =5.90% In Relation to Investment Operating Income Return on Investment = EBIT Avg Total Assets Particulars 2003 2002 2001

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Operating Income Return on Investment =359400/4950000 =7% =489800/3075000 =16% Return on Assets = Net Income Avg Total Assets Particulars 2003 2002 2001 Return on Assets =16467/6100000 =0.27% =195805/3800000 =5.15% =239013/2350000 =10.17% Return on Equity = Net Income Avg Total Equity Particulars 2003 2002 2001 Return on Equity =16467/1510000 =1.09% =16467/1510000 =13.19% =239013/1527500 =15.65%

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Williams Inc. has the following amounts included in its general ledger at the end of the current year: Organization costs ....................................... $130,000 Trademarks ................................... 160,000 Discount on bonds payable ........................... 55,000 Deposits with an advertising agency for ads to promote the goodwill of company ................. 30,000 Excess of cost over the fair value of net identifiable assets of acquired subsidiary ............................. 750,000 Cost of equipment acquired for research and development projects; the equipment has an alternative future use .................. 350,000 Costs of developing a secret formula for a product that is expected to be marketed for at least 20 years .............................. 900,000 Instructions (a)Using the information above, compute the total amount to be reported by Williams for intangible assets on its balance sheet at year-end. (b)If an item is not to be included in intangible…

Marked out of 20.00P Flag questionusing the income summary account for the month ofSiren MarketingAdjusted Trial BalanceMay 31, 2022Account TitleCashDebitCredit$8, 600Accounts Receivable$2, 500Prepaid Insurance$2,700 Accounts PayableUnearned RevenueKirk, Capital$1, 200$1, 800$5, 880Kirk, Withdrawals$1,600Service Revenue$8, 620Advertising Expenselnsurance ExpenseRent Expense Total$790$450$860$17,500 $17,500No comma or dollar sign should be included in the imput icklPrepare the closing entries in the proper order. For transactions that have more than 1 debit or more than 1 deditDebitAccount Title and Explanation Date May 31

7-2 Project: Company Accour x 121. Project Guidelines and Rubric x 121. 7-1 Problem Set: Module Sev X CengageNOWv2 | Online tea now.com/ilrn/takeAssignment/takeAssignmentMain.do?invoker3&takeAssignmentSessionLocator3D&inprogress3false eBook Show Me How Return on Total Assets A company reports the following income statement and balance sheet information for the current year: Net income $224,540 Interest expense 39,620 Average total assets Determine the return on total assets. If required, round the answer to one decimal place. 1.8 Check My Work Divide the sum of net income and interest expense by average total assets. Previa Check My Work ADE dy

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