Carson Electronics’ management has long viewed BGT Electronics as an industry leader and uses this firm as a model firm for analyzing its own performance. The balance sheet and income statements for the two firms are as follows: Calculate the following ratios for both Carson and BGT: a) Debt ratio: b) Average collection period: c) Fixed asset turnover: d) Return on equity:
Carson Electronics’ management has long viewed BGT Electronics as an industry leader and uses this firm as a model firm for analyzing its own performance. The balance sheet and income statements for the two firms are as follows: Calculate the following ratios for both Carson and BGT: a) Debt ratio: b) Average collection period: c) Fixed asset turnover: d) Return on equity:
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
Related questions
Question
Carson Electronics’ management has long viewed BGT Electronics as an industry leader and uses this firm as a model firm for analyzing its own performance. The
Calculate the following ratios for both Carson and BGT:
a) Debt ratio:
b) Average collection period:
c) Fixed asset turnover:
d)
Transcribed Image Text:Carson Electronics, Inc.
Balance Sheet ($000)
BGT Electronics, Inc.
Balance Sheet ($000)
Cash
Accounts receivable
Inventories
Current assets
Net fixed assets
Total assets
$ 2,000
4,500
1,500
$ 8,000
16,000
$24,000
$ 1,500
6,000
2,500
$10,000
25,000
$35,000
Accounts payable
Accrued expenses
Short-term notes payable
Current liabilities
$ 2,500
1,000
3,500
$ 7,000
8,000
9,000
$24,000
$ 5,000
1,500
1,500
$ 8,000
4,000
23,000
$35,000
Long-term debt
Owners' equity
Total liabilities and owners' equity
Carson Electronics, Inc.
Income Statement ($000)
BGT Electronics, Inc.
Income Statement ($000)
Net sales (all credit)
Cost of goods sold
Gross profit
Operating expenses
Net operating income
Interest expense
Earnings before taxes
Income taxes (40%)
$48,000
(36,000)
$12,000
(8,000)
$ 4,000
(1,150)
2,850
(1,140)
$ 1,710
$70,000
(42,000)
$28,000
(12,000)
$16,000
(550)
15,450
(6,180)
$ 9,270
Net income
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps with 3 images
Knowledge Booster
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.Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
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…
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