Company B Consolidated Statement of Income (000) Year Ending May 31 1996 1997 1998 1999 2000 Revenues $3,930,984 $3,789,668 $4,760,834 $6,470,625 $9,186,539 Cost and Expenses Cost of sales $2,386,993 $2,301,423 $2,865,280 $3,906,746 $5,502,993 Selling & Administrative $922,261 $974,099 $1,209,760 $1,588,612 $2,303,704 Interest expense $25,739 $15,282 $24,208 $39,498 $52,343 Other income/expense $1,475 $8,270 $11,722 $36,679 $32,277 $3,336,468 $3,299,074 $4,110,970 $5,571,535 $7,891,317 Income before income taxes $594,516 $490,594 $649,864 $899,090 $1,295,222 Income taxes $229,500 $191,800 $250,200 $345,900 $499,400 Net income $365,016 $298,794 $399,664 $553,190 $795,822 Company B Consolidatd Balance Sheets (000) Year Ending May 31+A2:G25 1996 1997 1998 1999 2000 Assets Current Assets Cash & equivalents $291,284 $518,816 $216,071 $262,117 $445,421 A/R $667,547 $703,682 $1,053,237 $1,346,125 $1,754,137 Inventory $592,986 $470,023 $629,742 $931,151 $1,338,640 Deferred income tax $26,378 $37,603 $72,657 $93,120 $135,663 Prepaid items $42,452 $40,307 $74,221 $94,427 $157,058 total current assets $1,620,647 $1,770,431 $2,045,928 $2,726,940 $3,830,919 Property, Plant and Equipment $377,995 $405,845 $554,879 $643,459 $922,369 Goodwill $157,894 $163,036 $495,907 $474,812 $464,191 Other assets $30,927 $34,503 $46,031 $106,417 $143,728 Total assets $2,187,463 $2,373,815 $3,142,745 $3,951,628 $5,361,207 Liabilities and Stockholders' Equity Current Liabilities Current portion long term debt $52,985 $3,857 $31,943 $7,301 $2,216 Notes payable $108,165 $127,378 $397,100 $445,064 $553,153 Accounts payable $135,701 $210,576 $297,656 $455,034 $687,121 Accrued liabilities $138,563 $181,889 $345,224 $480,407 $570,504 Income tax payable $17,150 $38,287 $35,612 $79,253 $53,923 total current liabilities $452,564 $561,987 $1,107,535 $1,467,059 $1,866,917 Long term debt $15,033 $12,364 $10,565 $9,584 $296,020 Non-current deferred income taxes $29,965 $18,228 $17,789 $1,883 Other liabilities $43,575 $39,987 $41,867 $41,402 $42,132 Redeemable preferred stock $300 $300 $300 $300 $300 Stockholders' Equity Common stock- A $159 $159 $155 $153 $152 Common stock- B $2,720 $2,704 $2,698 $2,702 $2,706 Capital in excess of stated value $108,451 $108,284 $122,436 $154,833 $210,650 Foreign currency adjustment ($7,790) ($15,123) $1,585 ($16,501) ($31,333) Retained earnings $1,542,486 $1,644,925 $1,837,815 $2,290,213 $2,973,663 Shareholders' equity $1,646,026 $1,740,949 $1,964,689 $2,431,400 $3,155,838 Total Liabilities and Shareholders' Equity $2,187,463 $2,373,815 $3,142,745 $3,951,628 $5,361,207 As an aid to Sylvia, a) calculate the ROE through the four parts Dupont formula for the five years, for the Company B. b) Briefly comment on the trend of each company’s total ROE and each of the four components.
Company B Consolidated Statement of Income (000) Year Ending May 31 1996 1997 1998 1999 2000 Revenues $3,930,984 $3,789,668 $4,760,834 $6,470,625 $9,186,539 Cost and Expenses Cost of sales $2,386,993 $2,301,423 $2,865,280 $3,906,746 $5,502,993 Selling & Administrative $922,261 $974,099 $1,209,760 $1,588,612 $2,303,704 Interest expense $25,739 $15,282 $24,208 $39,498 $52,343 Other income/expense $1,475 $8,270 $11,722 $36,679 $32,277 $3,336,468 $3,299,074 $4,110,970 $5,571,535 $7,891,317 Income before income taxes $594,516 $490,594 $649,864 $899,090 $1,295,222 Income taxes $229,500 $191,800 $250,200 $345,900 $499,400 Net income $365,016 $298,794 $399,664 $553,190 $795,822 Company B Consolidatd Balance Sheets (000) Year Ending May 31+A2:G25 1996 1997 1998 1999 2000 Assets Current Assets Cash & equivalents $291,284 $518,816 $216,071 $262,117 $445,421 A/R $667,547 $703,682 $1,053,237 $1,346,125 $1,754,137 Inventory $592,986 $470,023 $629,742 $931,151 $1,338,640 Deferred income tax $26,378 $37,603 $72,657 $93,120 $135,663 Prepaid items $42,452 $40,307 $74,221 $94,427 $157,058 total current assets $1,620,647 $1,770,431 $2,045,928 $2,726,940 $3,830,919 Property, Plant and Equipment $377,995 $405,845 $554,879 $643,459 $922,369 Goodwill $157,894 $163,036 $495,907 $474,812 $464,191 Other assets $30,927 $34,503 $46,031 $106,417 $143,728 Total assets $2,187,463 $2,373,815 $3,142,745 $3,951,628 $5,361,207 Liabilities and Stockholders' Equity Current Liabilities Current portion long term debt $52,985 $3,857 $31,943 $7,301 $2,216 Notes payable $108,165 $127,378 $397,100 $445,064 $553,153 Accounts payable $135,701 $210,576 $297,656 $455,034 $687,121 Accrued liabilities $138,563 $181,889 $345,224 $480,407 $570,504 Income tax payable $17,150 $38,287 $35,612 $79,253 $53,923 total current liabilities $452,564 $561,987 $1,107,535 $1,467,059 $1,866,917 Long term debt $15,033 $12,364 $10,565 $9,584 $296,020 Non-current deferred income taxes $29,965 $18,228 $17,789 $1,883 Other liabilities $43,575 $39,987 $41,867 $41,402 $42,132 Redeemable preferred stock $300 $300 $300 $300 $300 Stockholders' Equity Common stock- A $159 $159 $155 $153 $152 Common stock- B $2,720 $2,704 $2,698 $2,702 $2,706 Capital in excess of stated value $108,451 $108,284 $122,436 $154,833 $210,650 Foreign currency adjustment ($7,790) ($15,123) $1,585 ($16,501) ($31,333) Retained earnings $1,542,486 $1,644,925 $1,837,815 $2,290,213 $2,973,663 Shareholders' equity $1,646,026 $1,740,949 $1,964,689 $2,431,400 $3,155,838 Total Liabilities and Shareholders' Equity $2,187,463 $2,373,815 $3,142,745 $3,951,628 $5,361,207 As an aid to Sylvia, a) calculate the ROE through the four parts Dupont formula for the five years, for the Company B. b) Briefly comment on the trend of each company’s total ROE and each of the four components.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Company B Consolidated Statement of Income (000)
Year Ending May 31 | 1996 | 1997 | 1998 | 1999 | 2000 | |
Revenues | $3,930,984 | $3,789,668 | $4,760,834 | $6,470,625 | $9,186,539 | |
Cost and Expenses | ||||||
Cost of sales | $2,386,993 | $2,301,423 | $2,865,280 | $3,906,746 | $5,502,993 | |
Selling & Administrative | $922,261 | $974,099 | $1,209,760 | $1,588,612 | $2,303,704 | |
Interest expense | $25,739 | $15,282 | $24,208 | $39,498 | $52,343 | |
Other income/expense | $1,475 | $8,270 | $11,722 | $36,679 | $32,277 | |
$3,336,468 | $3,299,074 | $4,110,970 | $5,571,535 | $7,891,317 | ||
Income before income taxes | $594,516 | $490,594 | $649,864 | $899,090 | $1,295,222 | |
Income taxes | $229,500 | $191,800 | $250,200 | $345,900 | $499,400 | |
Net income | $365,016 | $298,794 | $399,664 | $553,190 | $795,822 | |
Company B Consolidatd
Year Ending May 31+A2:G25 | 1996 | 1997 | 1998 | 1999 | 2000 | |
Assets | ||||||
Current Assets | ||||||
Cash & equivalents | $291,284 | $518,816 | $216,071 | $262,117 | $445,421 | |
A/R | $667,547 | $703,682 | $1,053,237 | $1,346,125 | $1,754,137 | |
Inventory | $592,986 | $470,023 | $629,742 | $931,151 | $1,338,640 | |
$26,378 | $37,603 | $72,657 | $93,120 | $135,663 | ||
Prepaid items | $42,452 | $40,307 | $74,221 | $94,427 | $157,058 | |
total current assets | $1,620,647 | $1,770,431 | $2,045,928 | $2,726,940 | $3,830,919 | |
Property, Plant and Equipment | $377,995 | $405,845 | $554,879 | $643,459 | $922,369 | |
$157,894 | $163,036 | $495,907 | $474,812 | $464,191 | ||
Other assets | $30,927 | $34,503 | $46,031 | $106,417 | $143,728 | |
Total assets | $2,187,463 | $2,373,815 | $3,142,745 | $3,951,628 | $5,361,207 | |
Liabilities and |
||||||
Current Liabilities | ||||||
Current portion long term debt | $52,985 | $3,857 | $31,943 | $7,301 | $2,216 | |
Notes payable | $108,165 | $127,378 | $397,100 | $445,064 | $553,153 | |
Accounts payable | $135,701 | $210,576 | $297,656 | $455,034 | $687,121 | |
Accrued liabilities | $138,563 | $181,889 | $345,224 | $480,407 | $570,504 | |
Income tax payable | $17,150 | $38,287 | $35,612 | $79,253 | $53,923 | |
total current liabilities | $452,564 | $561,987 | $1,107,535 | $1,467,059 | $1,866,917 | |
Long term debt | $15,033 | $12,364 | $10,565 | $9,584 | $296,020 | |
Non-current deferred income taxes | $29,965 | $18,228 | $17,789 | $1,883 | ||
Other liabilities | $43,575 | $39,987 | $41,867 | $41,402 | $42,132 | |
Redeemable |
$300 | $300 | $300 | $300 | $300 | |
Stockholders' Equity | ||||||
Common stock- A | $159 | $159 | $155 | $153 | $152 | |
Common stock- B | $2,720 | $2,704 | $2,698 | $2,702 | $2,706 | |
Capital in excess of stated value | $108,451 | $108,284 | $122,436 | $154,833 | $210,650 | |
Foreign currency adjustment | ($7,790) | ($15,123) | $1,585 | ($16,501) | ($31,333) | |
$1,542,486 | $1,644,925 | $1,837,815 | $2,290,213 | $2,973,663 | ||
Shareholders' equity | $1,646,026 | $1,740,949 | $1,964,689 | $2,431,400 | $3,155,838 | |
Total Liabilities and Shareholders' Equity | $2,187,463 | $2,373,815 | $3,142,745 | $3,951,628 | $5,361,207 |
As an aid to Sylvia, a) calculate the ROE through the four parts Dupont formula for the five years, for the Company B.
b) Briefly comment on the trend of each company’s total ROE and each of the four components.
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