$49,720 $42,240 $28,340Required:1. Compute the following ratios for the past two years. (Do not round intermediate calculations. Round the final answers to 2 decimaplaces.)RatioYear 8Year 7Profitability ratios:1. Return on equity2. Return on assets3. Gross profit percentage4 Net profit marginAsset turnover ratios:567Liquidity ratios!8Current ratioSolvency ratios:9. Times-interest-earned ratio10 Debt-to-equity ratioNext >Fixed asset turnoverReceivables turnoverInventory turnover%%%%%%%%Prev2 of 12 Consolidated Statements of EarningsFor the Years Ended December 31,(in thousands of dollars)Year 8Sales$64,000Cost of sales.50,000Gross profit14,000Operating expenses before interest and income taxes8,000Interest expense1,780Earnings before income taxes4,220Income tax expense1,900Net earnings$ 2,320MORKSEN CORP.Consolidated Statements of Financial PositionAt December 31,(in thousands of dollars)Year 8Year 7AssetsCurrent assetsCash$ 480$ 38074010,880Short-term investmentsAccounts receivable7408,400Merchandise inventory16,66010,060Total current assets28,660 19,680Property, plant, and equipmentLand4,0004,000Buildings and equipment26,00026,00030,00030,0008,9407,440Less: Accumulated depreciation.Net property, plant, and equipment21,06022,560Total assets$49,720$42, 240Liabilities and Shareholders' EquityCurrent LiabilitiesBank loan$16,500$11,400Accounts payable6,0004,300Other liabilities1,6401,600Income tax payable9601,040Total current liabilities25,10018,340Shareholders' equitymmon shares20,00020,000Retained earnings4,1403,520Other comprehensive income38048024,620Total shareholders' equity23,900Total liabilities and shareholders' equity$49,720$42,240< PrevYear 7Year 6$56,000$46,80043,00036,00013,00010,8007,4006,6201,2204,3804,1802,0401,940$ 2,340 $ 2,240Year 6$1,0007405,1407,22014,1002,00018,00020,0005,76014,240$28,340$2,8801,5001,0005,38020,0002,64032022,960$28,3402 of 12Ne

calculation of above requirement are as follows

1. Compute the following ratios for the past two years. (Do not round intermediate calculations. Round the final answers places.) Ratio Year 8 Year 7 Profitability ratios: 1. Return on equity 2. Return on assets 3. Gross profit percentage 4. Net profit margin Asset turnover ratios: 5 Fixed asset turnover Receivables turnover 6 7 Inventory turnover Liquidity ratios 8 Current ratio % % % % % % % %

1. Compute the following ratios for the past two years. (Do not round intermediate calculations. Round the final answers places.) Ratio Year 8 Year 7 Profitability ratios: 1. Return on equity 2. Return on assets 3. Gross profit percentage 4. Net profit margin Asset turnover ratios: 5 Fixed asset turnover Receivables turnover 6 7 Inventory turnover Liquidity ratios 8 Current ratio % % % % % % % %

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Selected current year-end financial statements of Cabot Corporation follow. (All sales were on credit; selected balance sheet amounts at December 31 of the prior year were inventory, $52,900; total assets, $219,400; common stock, $86,000; and retained earnings, $31,757.) Assets Cash Short-term investments Accounts receivable, net Merchandise inventory. Prepaid expenses Plant assets, net Total assets CABOT CORPORATION Income Statement For Current Year Ended December 31 Sales Cost of goods sold Gross profit $ 14,000 8,200 30,000 38,150 2,600 149,300 $ 242, 250 Operating expenses Interest expense Income before taxes Income tax expense Net income $ 456,600 297,750 158,850 99,000 4,600 55,250 22,257 $32,993 CABOT CORPORATION Balance Sheet December 31 of current year Liabilities and Equity Accounts payable Accrued wages payable Income taxes payable Long-term note payable, secured by mortgage on plant assets Common stock Retained earnings Total liabilities and equity $ 18,500 3,600 4,000…
Long-term debt ratio Times interest earned Current ratio 12 Quick ratio 1.0 Cash ratio 0.5 Inventory turnover 4.0 Average collection period 73 days Use the above information from the tables to work out the following missing entries, and then calculate the company's return on equity. Note: Turnover and the average collection period are calculated using start-of- year, not average, values. (Enter your answers in millions. Round intermediate calculations and final answers to 2 decimal places.) INCOME STATEMENT (Figures in 5 millions) Net sales Cost of goods sold Selling, general, and administrative expenses Depreciation 14.00 24.00 Earnings before interest and taxes (EBIT) Interest expense Income before tax Tax (35% of income before tax) Net income Assets Cash and marketable securities Accounts receivable Inventories Total current assets Net property, plant, and equipment Total assets Liabilities and shareholders' equity Accounts payable Notes payable Total current liabilities Long-term…
Compute common-size percents for the following comparative income statements (round percents to one decimal). Using the common-size percents, which item is most responsible for the decline in net income?
What are three of the benefits of common-sized analysis using the inverse operating asset turnover (ATO) ratios? a) provides insight into the age of the assets b) the item is expressed as a percentage of current year sales c) is more comparable year-to-year than other methods d) negates the issue with small denominators e) it provides a common denominator for all accounts
What is the inaccuracy under the RR column?
am.101.
2) Ratios Based on the information given in picture #1, complete the following ratios for the last TWO years and indicate whether the trend is favorable or unfavorable. Note percentages and times should be to one decimal place (e.g. 14.8%; 5.8x) Profitability Ratios Current Yr. Prior Yr. Fav/Unfav. Gross Margin (%) {Gross Income/Sales Revenue} Profit Margin (%) {Net income/ Sales Revenue} Return on Assets (%) {Net Income/ Average Total Assets}
2) Ratios Based on the information given in picture #1, complete the following ratios for the last TWO years and indicate whether the trend is favorable or unfavorable. Note percentages and times should be to one decimal place (e.g. 14.8%; 5.8x) Liq./Solv. Ratios Current Yr. Prior Yr. Fav/Unfav. Current Ratio (X) {Total. Current Assets/ Total Current Liabilities} Quick Ratio (X) {Cash + Short term Investments + Current Receivables/ Current Liabilities} Day's Sales Uncollected (days) {Total Accounts Receivables / Sales x 365}
19. Using the following information, calculate the return on assets. Net income for November Total assets, November 1 5,000 76,000 Total assets, November 30 80,250 ... Identify the formula and then solve for return on assets (ROA). (Round the ROA to the nearest tenth percent, X.X%.) ÷ ROA %
Required: 1. Complete the following columns for each item in the comparative financial statements (Negative answers shoul be indicated by a minus sign. Round percentage answers to 2 decimal places, i.e., 0.1243 should be entered as 12.43.): Increase (Decrease) Year 2 over Year 1 Amount Percentage Statement of earnings: Sales revenue Cost of sales Gross margin Operating expenses and interest expense Earnings before income taxes Income tax expense Net earnings $ 45,770 38,650 7,120 4,020 3,100 1,050 $ 2,050 Statement of financial position: Cash (4,720) Accounts receivable (net) (4,220) Inventory 6,200 Property, plant, and equipment (net) 6,380 $ 3,640 Current liabilities (3,840) Long-term debt 3,530 Common shares 0 Retained earnings 3,950 $ 3,640
Complete the two final columns shown beside each item in Pinnacle Plus's comparative financial statements. (Decreases should be indicated by a minus sign. Round percentage values to 1 decimal place.) DINNACLE PLUe PINNACLE PLUS Horizontal Analysis Increase (Decrease) in the Current year (versus Previous year). Current Year Previous Year Amount Percentage Income Statement Sales Revenue 118,000 $ 53,600 64,400 $ 104,600 % Cost of Goods Sold 48,800 Gross Profit Operating Expenses Interest Expense 55,800 40,000 35,000 4,800 4,800 Income before Income Tax Expense 19,600 16,000 Income Tax Expense (30%) Net Income Balance Sheet Cash Accounts Receivable, Net Inventory Property and Equipment, Net Total Assets Accounts Payable Income Tax Payable Note Payable (long-term) Total Liabilities Common Stock (par $10) Retained Earnings Total Liabilities and Stockholders' Equity 5,880 13,720 $ 4,800 11,200 % 69,620 $ 35,400 10,400 % 18,600 25,800 39,600 95,800 109,000 209,820 $ 194,400 $ 43,600 $ 35,800…
8