2. Cane Company shows the following data: a. b. C. ● Long-term liabilities Owner's Equity Non-current Assets Inventory Cash Marketable Securities Receivables 2014 P2,000,000 1,500,000 2,500,000 500,000 200,000 900,000 500,000 Compute for the current ratio of Cane Company for 2014. Compute for the quick ratio of Cane Company for 2014. Assuming a net income of $200,000 for 2014: Compute for return on assets. Compute for return on equity. 2013 P1,500,000 800,000 1,250,000 300,000 50,000 1,000,000 75,000

Entrepreneurial Finance
6th Edition
ISBN:9781337635653
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Chapter5: Evaluating Operating And Financial Performance
Section: Chapter Questions
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2.
●
Cane Company shows the following data:
●
Marketable Securities
Receivables
●
Long-term liabilities
Owner's Equity
Non-current Assets
Inventory
Cash
a.
b.
Compute for the current ratio of Cane Company for 2014.
Compute for the quick ratio of Cane Company for 2014.
Assuming a net income of 200,000 for 2014:
Compute for return on assets.
Compute for return on equity.
3. Pudding Company has current assets of 1,500,000 with a current ratio of 1.2 and a quick ratio
of 0.9.
●
c.
a. How much is Pudding's current liabilities?
b. How much is Pudding's inventory?
4. The following ratios were computed for Tourist Company for the year 2014:
● Asset turnover, 1.60 times
2014
$2,000,000
1,500,000
2,500,000
500,000
200,000
900,000
500,000
Return on assets, 5%
Compute for Tourist' profit margin.
5. Skateboard Company reported sales amounted to $5,000,000. During the year, average total
assets were $3,000,000 with average receivables of $500,000. 30% of the sales were made
on cash basis with the rest being made on credit.
How much is the total assets turnover?
2013
Compute for the receivable turnover.
●
Compute for days sales outstanding (average collection period).
6. Sales of Jet Company amounted to $2,000,000. Cost of sales was 60% of sales. Average
inventory levels during the year was 400,000.
1,500,000
800,000
1,250,000
300,000
50,000
1,000,000
75,000
Compute for inventory turnover.
Compute for average days in inventory (average inventory period).
Transcribed Image Text:2. ● Cane Company shows the following data: ● Marketable Securities Receivables ● Long-term liabilities Owner's Equity Non-current Assets Inventory Cash a. b. Compute for the current ratio of Cane Company for 2014. Compute for the quick ratio of Cane Company for 2014. Assuming a net income of 200,000 for 2014: Compute for return on assets. Compute for return on equity. 3. Pudding Company has current assets of 1,500,000 with a current ratio of 1.2 and a quick ratio of 0.9. ● c. a. How much is Pudding's current liabilities? b. How much is Pudding's inventory? 4. The following ratios were computed for Tourist Company for the year 2014: ● Asset turnover, 1.60 times 2014 $2,000,000 1,500,000 2,500,000 500,000 200,000 900,000 500,000 Return on assets, 5% Compute for Tourist' profit margin. 5. Skateboard Company reported sales amounted to $5,000,000. During the year, average total assets were $3,000,000 with average receivables of $500,000. 30% of the sales were made on cash basis with the rest being made on credit. How much is the total assets turnover? 2013 Compute for the receivable turnover. ● Compute for days sales outstanding (average collection period). 6. Sales of Jet Company amounted to $2,000,000. Cost of sales was 60% of sales. Average inventory levels during the year was 400,000. 1,500,000 800,000 1,250,000 300,000 50,000 1,000,000 75,000 Compute for inventory turnover. Compute for average days in inventory (average inventory period).
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