Calculate the return on assets and the return on shareholders' equity for both companies. (Round answers to 1 decimal place, e.g. 15.1%.) Cool Brewery Northern Beer 11.22 % 22.21 Return on assets 17.66 30.40 Return on shareholders' equity eTextbook and Media * Your answer is incorrect. Calculate the debt to equity ratio for both companies at the end of 2020. (Round answers to 2 decimal places, eg. 0.84.) Cool Brewery Northern Beer 1.63:1 0.39:1 Debt to equity ratio eTextbook and Media X Your answer is incorrect. Calculate the net debt as a percentage of total capitalization for both companies. (Round answers to 1 decimal place, e.g. 15.1%.) Cool Brewery Northern Beer 62 % 28.50 Net debt as a percentage of total capitalization

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Calculate the return on assets and the return on shareholders' equity for both companies. (Round answers to 1 decimal place, e.g.
15.1%.)
Cool Brewery
Northern Beer
11.22
22.21
Return on assets
17.66
30.40
Return on shareholders' equity
eTextbook and Media
X Your answer is incorrect.
Calculate the debt to equity ratio for both companies at the end of 2020. (Round answers to 2 decimal places, e.g. 0.84.)
Cool Brewery
Northern Beer
1.63:1
0.39:1
Debt to equity ratio
eTextbook and Media
X Your answer is incorrect.
Calculate the net debt as a percentage of total capitalization for both companies. (Round answers to 1 decimal place, e.g. 15.1%.)
Cool Brewery
Northern Beer
62
28.50
%
Net debt as a percentage of total capitalization
Transcribed Image Text:Calculate the return on assets and the return on shareholders' equity for both companies. (Round answers to 1 decimal place, e.g. 15.1%.) Cool Brewery Northern Beer 11.22 22.21 Return on assets 17.66 30.40 Return on shareholders' equity eTextbook and Media X Your answer is incorrect. Calculate the debt to equity ratio for both companies at the end of 2020. (Round answers to 2 decimal places, e.g. 0.84.) Cool Brewery Northern Beer 1.63:1 0.39:1 Debt to equity ratio eTextbook and Media X Your answer is incorrect. Calculate the net debt as a percentage of total capitalization for both companies. (Round answers to 1 decimal place, e.g. 15.1%.) Cool Brewery Northern Beer 62 28.50 % Net debt as a percentage of total capitalization
(Common-size analysis and differences in profitability and leverage)
Comparative fınancial statement data for Cool Brewery Ltd. and Northern Beer Ltd., two competitors, follow (amounts in thousands):
Cool Brewery Ltd.
Northern Beer Ltd.
2020
2019
2020
2019
Net sales
$214,040
$40,450
Cost of goods sold
100,850
16,600
Operating expenses
81,360
14,570
Interest expense
7,890
390
Income tax expense
4,620
1,090
Cash
11,690
$9,490
4,670
$2,680
Other current assets
77,820
83,860
8,500
6,950
Long-term assets (net)
191,930
193,340
30,610
30,120
Current liabilities
75,220
59,230
3,920
4,280
Long-term liabilities
99,310
114,940
7,240
7,050
Share capital
52,600
44,900
17,800
15,000
Retained earnings
54,310
67,620
14,820
13,420
Transcribed Image Text:(Common-size analysis and differences in profitability and leverage) Comparative fınancial statement data for Cool Brewery Ltd. and Northern Beer Ltd., two competitors, follow (amounts in thousands): Cool Brewery Ltd. Northern Beer Ltd. 2020 2019 2020 2019 Net sales $214,040 $40,450 Cost of goods sold 100,850 16,600 Operating expenses 81,360 14,570 Interest expense 7,890 390 Income tax expense 4,620 1,090 Cash 11,690 $9,490 4,670 $2,680 Other current assets 77,820 83,860 8,500 6,950 Long-term assets (net) 191,930 193,340 30,610 30,120 Current liabilities 75,220 59,230 3,920 4,280 Long-term liabilities 99,310 114,940 7,240 7,050 Share capital 52,600 44,900 17,800 15,000 Retained earnings 54,310 67,620 14,820 13,420
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