Based on the financial statement of UNIVERSAL OFFICE FURNISHINGS INC. above,a) Prepare Two(2) financial ratios for each of Profitability, Liquidity, Efficiency/Activity andLeverage ratios. Show all workings.b) Provide your comment and analysis of the above ratios by comparing them for financialyear 2016 and 2015.c) Using the relevant Efficiency/Activity Ratios for the above, compute the Cash ConversionCycle (CCC) for UNIVERSAL OFFICE FURNISHINGS INC. for year 2016 and 2015. TABLE 7.3 CORPORATE BALANCE SHEETUniversal Office Furnishings, Inc. Comparative Balance Sheets December 31 ($ millions)2016AssetsCurrent assetsCash and equivalentsReceivablesInventoriesOther current assetsTotal current assetsNoncurent assetsProperty, plant, & equipment, grossAccumulated depreciationProperty, plant, & equipment, netOther noncurrent assetsTotal noncurrent assetsTotal assetsLlabilities and stockholders' equityCurrent liabilitiesAccounts payableShort-term debtOther current liabilitiesTotal current liabilitiesNoncurrent liabilitiesLong-term debtOther noncurrent liabilitiesTotal noncurrent liabilitiesTotal abilitiesStockholders' equityCommon sharesRetained earningsTotal stockholders' equityTotal llabilities and stockholders equitySales revenueCost of goods soldGross profitSelling, general, and administrative, and other operatingexpensesDepreciation & amortizationOther expensesTotal operating expensesEamings before Interest & taxes (EBIT)Interest expenseEarnings before taxesIncome taxesNet profit after taxes$ 95.8$227.2$103.7$ 73.6$500.3Dividends paid per shareEarnings per share (EPS)Number of common shares outstanding (in millions)$771.2($372.5)$398.7$ 42.2$440.9$941.2$114.2$174.3$ 85.5$374.0$1778$94.9$272.7$646.7$926$201.9$294.5$941.22016$1,938.0$1,128.5$ 809.6$ 496.7$$TABLE 7.4 CORPORATE INCOME STATEMENTUniversal Office Furnishings, Inc. Income Statements Fiscal Year Ended December 31 ($ millions)77.10.5$574.3$235.2ASS$ 13.4$ 221.882.1$$ 139.72015$ 0.15$2.2661.80$ 80.0$192.4$107.5$ 45.2$425.1$696.6($379.9)$316.7$ 19.7$336.4$761.5$ 82.4$ 79.3$89.6$251.3$190.9$110.2$301.1$552.4$137671.5$209.1$761.52015$1,766.2$1,034.5$ 731.7$ 419.5$ 62.1$ 12.9$ 494.5$ 237.2$ 7.3$ 229.9$ 88.1$ 141.8$$0.132.1765.30

Ratio Analysis - This is an analysis done in terms of an entity's financial statements. Such…

Based on the financial statement of UNIVERSAL OFFICE FURNISHINGS INC. above, a) Prepare Two(2) financial ratios for each of Profitability, Liquidity, Efficiency/Activity and Leverage ratios. Show all workings. b) Provide your comment and analysis of the above ratios by comparing them for financial year 2016 and 2015. c) Using the relevant Efficiency/Activity Ratios for the above, compute the Cash Conversion Cycle (CCC) for UNIVERSAL OFFICE FURNISHINGS INC. for year 2016 and 2015.

Based on the financial statement of UNIVERSAL OFFICE FURNISHINGS INC. above, a) Prepare Two(2) financial ratios for each of Profitability, Liquidity, Efficiency/Activity and Leverage ratios. Show all workings. b) Provide your comment and analysis of the above ratios by comparing them for financial year 2016 and 2015. c) Using the relevant Efficiency/Activity Ratios for the above, compute the Cash Conversion Cycle (CCC) for UNIVERSAL OFFICE FURNISHINGS INC. for year 2016 and 2015.

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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Question

Based on the financial statement of UNIVERSAL OFFICE FURNISHINGS INC. above,
a) Prepare Two(2) financial ratios for each of Profitability, Liquidity, Efficiency/Activity and
Leverage ratios. Show all workings.
b) Provide your comment and analysis of the above ratios by comparing them for financial
year 2016 and 2015.
c) Using the relevant Efficiency/Activity Ratios for the above, compute the Cash Conversion
Cycle (CCC) for UNIVERSAL OFFICE FURNISHINGS INC. for year 2016 and 2015.

TABLE 7.3 CORPORATE BALANCE SHEET
Universal Office Furnishings, Inc. Comparative Balance Sheets December 31 ($ millions)
2016
Assets
Current assets
Cash and equivalents
Receivables
Inventories
Other current assets
Total current assets
Noncurent assets
Property, plant, & equipment, gross
Accumulated depreciation
Property, plant, & equipment, net
Other noncurrent assets
Total noncurrent assets
Total assets
Llabilities and stockholders' equity
Current liabilities
Accounts payable
Short-term debt
Other current liabilities
Total current liabilities
Noncurrent liabilities
Long-term debt
Other noncurrent liabilities
Total noncurrent liabilities
Total abilities
Stockholders' equity
Common shares
Retained earnings
Total stockholders' equity
Total llabilities and stockholders equity
Sales revenue
Cost of goods sold
Gross profit
Selling, general, and administrative, and other operating
expenses
Depreciation & amortization
Other expenses
Total operating expenses
Eamings before Interest & taxes (EBIT)
Interest expense
Earnings before taxes
Income taxes
Net profit after taxes
$ 95.8
$227.2
$103.7
$ 73.6
$500.3
Dividends paid per share
Earnings per share (EPS)
Number of common shares outstanding (in millions)
$771.2
($372.5)
$398.7
$ 42.2
$440.9
$941.2
$114.2
$174.3
$ 85.5
$374.0
$1778
$94.9
$272.7
$646.7
$926
$201.9
$294.5
$941.2
2016
$1,938.0
$1,128.5
$ 809.6
$ 496.7
$
$
TABLE 7.4 CORPORATE INCOME STATEMENT
Universal Office Furnishings, Inc. Income Statements Fiscal Year Ended December 31 ($ millions)
77.1
0.5
$574.3
$235.2
ASS
$ 13.4
$ 221.8
82.1
$
$ 139.7
2015
$ 0.15
$
2.26
61.80
$ 80.0
$192.4
$107.5
$ 45.2
$425.1
$696.6
($379.9)
$316.7
$ 19.7
$336.4
$761.5
$ 82.4
$ 79.3
$89.6
$251.3
$190.9
$110.2
$301.1
$552.4
$1376
71.5
$209.1
$761.5
2015
$1,766.2
$1,034.5
$ 731.7
$ 419.5
$ 62.1
$ 12.9
$ 494.5
$ 237.2
$ 7.3
$ 229.9
$ 88.1
$ 141.8
$
$
0.13
2.17
65.30

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