Homework Help is Here – Start Your Trial Now!
Business
Finance
a. Has Joshua & White's liquidity position improved or worsened? Explain. b. Has Joshua & White's ability to manage its assets improved or worsened? Explain. c. How has Joshua & White's profitability changed during the last year?

a. Has Joshua & White's liquidity position improved or worsened? Explain. b. Has Joshua & White's ability to manage its assets improved or worsened? Explain. c. How has Joshua & White's profitability changed during the last year?

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
See similar textbooks
icon
Related questions
Question

Financial Ratio Analysis.  A financial ratio by itself tells us little about a company since financial ratios vary a great deal across industries.  There are two basic methods for analyzing financial ratios for a company: time trend analysis and peer group analysis.  Why might each of these analysis methods be useful?  What does each tell you about the company’s financial health?

Profitability Ratios Profit Margin Basic Earning Power Return on Assets Return on Equity Market Value Ratios Earnings per share Price-to-earnings ratio Cash flow per share Price-to-cash flow ratio Book Value per share Market-to-book ratio a. Has Joshua & White's liquidity position improved or worsened? Explain. 8.86% 19.48% 10.93% 16.10% c. How has Joshua & White's profitability changed during the last year? ΝΑ 10.65 ΝΑ 7.11 ΝΑ 1.72 b. Has Joshua & White's ability to manage its assets improved or worsened? Explain.
Transcribed Image Text:Profitability Ratios Profit Margin Basic Earning Power Return on Assets Return on Equity Market Value Ratios Earnings per share Price-to-earnings ratio Cash flow per share Price-to-cash flow ratio Book Value per share Market-to-book ratio a. Has Joshua & White's liquidity position improved or worsened? Explain. 8.86% 19.48% 10.93% 16.10% c. How has Joshua & White's profitability changed during the last year? ΝΑ 10.65 ΝΑ 7.11 ΝΑ 1.72 b. Has Joshua & White's ability to manage its assets improved or worsened? Explain.
Joshua & White Technologies December 31 Income Statements (Thousands of Dollars) Sales COGS except excluding depr. and amort. Depreciation and Amortization Other operating expenses EBIT Interest Expense EBT Taxes (25%) Net Income Common dividends Addition to retained earnings Other Data Year-end Stock Price # of shares (Thousands) Lease payment (Thousands of Dollars) Sinking fund payment (Thousands of Dollars) Ratio Analysis Liquidity Ratios Current Ratio Quick Ratio Asset Management Ratios Inventory Turnover (Total COGS/Inventories) Days Sales Outstanding Fixed Assets Turnover Total Assets Turnover Debt Management Ratios Debt Ratio (Total debt-to-assets) Liabilities-to-assets ratio Times-interest-earned ratio EBITDA coverage ratio 2019 $420,000 300,000 19,660 27,600 $72,740 5,740 $67,000 16,750 $50.250 $18,125 $32,125 2019 $90.00 4,052 $20,000 $5,000 2019 2.44 0.37 3.57 45.63 2018 $400,000 298,000 18,000 22,000 $62,000 4,460 $57,540 14,385 $34.524 $17,262 $17,262 2018 $96.00 4,000 $20,000 $5,000 2018 Industry Avg 2.52 2.58 0.46 1.53 5.32 43.80 7.69 47.45 2.04 1.23 20.0% 32.1% 15.33 4.18 Calculate the ratios and answer the questions below. Add more space to the yellow boxes if you need to. Joshua & White Technologies: December 31 Balance Sheets (Thousands of Dollars) Assets Cash and cash equivalents Short-term investments Accounts Receivable Inventories Total current assets Net fixed assets Total assets Liabilities and equity Accounts payable Accruals Notes payable Total current liabilities Long-term debt Total liabilities Common stock Retained Earnings Total common equity Total liabilities and equity 2019 2018 $21,000 $20,000 3,759 3,240 52,500 48,000 84,000 56,000 $161,259 $127,240 223,097 200,000 $384,356 $327,240 $33,600 $32,000 12,600 12,000 19,929 6,480 $66,129 $50,480 67,662 58,320 $133,791 $108,800 178,440 178,440 72,125 40,000 $250,565 $218,440 $384,356 $327,240
Transcribed Image Text:Joshua & White Technologies December 31 Income Statements (Thousands of Dollars) Sales COGS except excluding depr. and amort. Depreciation and Amortization Other operating expenses EBIT Interest Expense EBT Taxes (25%) Net Income Common dividends Addition to retained earnings Other Data Year-end Stock Price # of shares (Thousands) Lease payment (Thousands of Dollars) Sinking fund payment (Thousands of Dollars) Ratio Analysis Liquidity Ratios Current Ratio Quick Ratio Asset Management Ratios Inventory Turnover (Total COGS/Inventories) Days Sales Outstanding Fixed Assets Turnover Total Assets Turnover Debt Management Ratios Debt Ratio (Total debt-to-assets) Liabilities-to-assets ratio Times-interest-earned ratio EBITDA coverage ratio 2019 $420,000 300,000 19,660 27,600 $72,740 5,740 $67,000 16,750 $50.250 $18,125 $32,125 2019 $90.00 4,052 $20,000 $5,000 2019 2.44 0.37 3.57 45.63 2018 $400,000 298,000 18,000 22,000 $62,000 4,460 $57,540 14,385 $34.524 $17,262 $17,262 2018 $96.00 4,000 $20,000 $5,000 2018 Industry Avg 2.52 2.58 0.46 1.53 5.32 43.80 7.69 47.45 2.04 1.23 20.0% 32.1% 15.33 4.18 Calculate the ratios and answer the questions below. Add more space to the yellow boxes if you need to. Joshua & White Technologies: December 31 Balance Sheets (Thousands of Dollars) Assets Cash and cash equivalents Short-term investments Accounts Receivable Inventories Total current assets Net fixed assets Total assets Liabilities and equity Accounts payable Accruals Notes payable Total current liabilities Long-term debt Total liabilities Common stock Retained Earnings Total common equity Total liabilities and equity 2019 2018 $21,000 $20,000 3,759 3,240 52,500 48,000 84,000 56,000 $161,259 $127,240 223,097 200,000 $384,356 $327,240 $33,600 $32,000 12,600 12,000 19,929 6,480 $66,129 $50,480 67,662 58,320 $133,791 $108,800 178,440 178,440 72,125 40,000 $250,565 $218,440 $384,356 $327,240
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 4 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Cash Flow Statement Analysis
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
Essentials Of Investments
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
FUNDAMENTALS OF CORPORATE FINANCE
FUNDAMENTALS OF CORPORATE FINANCE
Finance
ISBN:
9781260013962
Author:
BREALEY
Publisher:
RENT MCG
Financial Management: Theory & Practice
Financial Management: Theory & Practice
Finance
ISBN:
9781337909730
Author:
Brigham
Publisher:
Cengage
Foundations Of Finance
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS