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Analysis Formula Current assets/ Current liabilities Net sales/ 61,750/8100=7.6 362.000/4120=87.8 365/7.6=48 365/87.8-4.15 Ratio current ratio Account Receivab Average le accounts Turnove receivable, net Average 365/ Collecti Account on Receivable $20,245/ $11,245=1.8 $48,750/ $50,450=0.9 Pan Interpret da, ation Inc 1.8 0.9 7.6 87.8 48.02 4.15 AI Oth manninn aim Soooood

Analysis Formula Current assets/ Current liabilities Net sales/ 61,750/8100=7.6 362.000/4120=87.8 365/7.6=48 365/87.8-4.15 Ratio current ratio Account Receivab Average le accounts Turnove receivable, net Average 365/ Collecti Account on Receivable $20,245/ $11,245=1.8 $48,750/ $50,450=0.9 Pan Interpret da, ation Inc 1.8 0.9 7.6 87.8 48.02 4.15 AI Oth manninn aim Soooood

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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What company is better in the short term investment
Ratio Analysis Formula current Current ratio assets/ Current liabilities Account Net sales/ Receivab Average le accounts Turnove receivable, net Average 365/ Collecti Account on Receivable Period Turnover Inventor Cost of Y goods Turnove sold/ r Days in Inventor current Cash Debt Coverag e Profit Margin $20,245/ $11.245=1.8 $48,750/ $50,450=0.9 61,750/8100=7.6 362.000/4120=87.8 365/7.6=48 365/87.8=4.15 39,900/8,020 4.97 27,680/32,500=0.8 8.020/39,900*365=73. 3 32.500/27,680*365=4 28 4900/11,245+10.300/2= 0.45 25.900/52.640+50,450/2= 0.50 3,245/61750=0.050 13,580/362,000=0.03 Average inventory Average inventory/ cost of good sold 365 net cash provided by operating activities/ average current liability Net income/ne t sales Al Pan Oth da, aim Inc 1.8 0.9 7.6 87.8 48.02 4.15 4.97 0.8 428. 5 0.50 0.05 0.03 73.3 0.45 Interpret ation
Transcribed Image Text:Ratio Analysis Formula current Current ratio assets/ Current liabilities Account Net sales/ Receivab Average le accounts Turnove receivable, net Average 365/ Collecti Account on Receivable Period Turnover Inventor Cost of Y goods Turnove sold/ r Days in Inventor current Cash Debt Coverag e Profit Margin $20,245/ $11.245=1.8 $48,750/ $50,450=0.9 61,750/8100=7.6 362.000/4120=87.8 365/7.6=48 365/87.8=4.15 39,900/8,020 4.97 27,680/32,500=0.8 8.020/39,900*365=73. 3 32.500/27,680*365=4 28 4900/11,245+10.300/2= 0.45 25.900/52.640+50,450/2= 0.50 3,245/61750=0.050 13,580/362,000=0.03 Average inventory Average inventory/ cost of good sold 365 net cash provided by operating activities/ average current liability Net income/ne t sales Al Pan Oth da, aim Inc 1.8 0.9 7.6 87.8 48.02 4.15 4.97 0.8 428. 5 0.50 0.05 0.03 73.3 0.45 Interpret ation
Heading 2 Title Subtitle Asset Net sales/ Turnove Average Return on Assets Return on Commo n Stockhol der's Equity Debt to Assets Times Interest Earned Cash Debt Coverag by e free Cash Flow Subtle Em... Emphasis Intense E... Styles 61,750/43,850+41,850 /2= 1.44 1.44 2.25 362,000/159,750+161, 250/2=2.25 3,245/41,850=0.077 0.077 0.08 13,580/159,750=0.08 3245- 19 0.14 495/13,240+15450= 0.19 13,580- 3850/62480+71,450= 0.14 4900/28,750 26050/2 0.17 = 0.17 total assets Net income/tot al assets Net income- Preferred dividend/Ave rage common stockholders 1 equity net cash provided operating 25,900/94,500+98,300 activities/a /2=0.26 verage total liability net cash 4,900-1,452-495= provided 2,953 by operating 25,900-10,750- activities- 3,850-1 1,300 Capital expenditur e-cash dividends 0.26 2,953 1130 0 Strong Quote
Transcribed Image Text:Heading 2 Title Subtitle Asset Net sales/ Turnove Average Return on Assets Return on Commo n Stockhol der's Equity Debt to Assets Times Interest Earned Cash Debt Coverag by e free Cash Flow Subtle Em... Emphasis Intense E... Styles 61,750/43,850+41,850 /2= 1.44 1.44 2.25 362,000/159,750+161, 250/2=2.25 3,245/41,850=0.077 0.077 0.08 13,580/159,750=0.08 3245- 19 0.14 495/13,240+15450= 0.19 13,580- 3850/62480+71,450= 0.14 4900/28,750 26050/2 0.17 = 0.17 total assets Net income/tot al assets Net income- Preferred dividend/Ave rage common stockholders 1 equity net cash provided operating 25,900/94,500+98,300 activities/a /2=0.26 verage total liability net cash 4,900-1,452-495= provided 2,953 by operating 25,900-10,750- activities- 3,850-1 1,300 Capital expenditur e-cash dividends 0.26 2,953 1130 0 Strong Quote
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