Compare Income Statements and Balance Sheets of Competitors a. Following are selected income statements from two pharmaceutical companies, Pfizer and Dr. Reddy's, for their respective 2018 fiscal years. Express each income statement amount as a percentage of sales. Note: Round percentage to one decimal point (for example, round 18.566% to 18.6%). Income Statement ($ millions) Sales Pfizer Dr. Reddy's $46,136 0% $1,876 0% Cost of goods sold 11,248 096 1,009 096 Gross profit 34,888 096 867 096 Total expenses Net income 26,841 $8,047 09 096 878 $(11) 096 096 b. Following are selected balance sheets from two pharmaceutical companies, Pfizer and Dr. Reddy's, for their respective 2018 fiscal years. Express each balance sheet amount as a percentage of total assets. Note: Round percentage to one decimal point (for example, round 18.566% to 18.6%). Balance Sheet ($ millions) Pfizer Dr. Reddy's Current assets $42,936 0% $1,448 096 Long-term assets 109,496 096 1,781 Total assets $152,432 096 $3,229 Current liabilities $27,398 096 $920 Long-term liabilities 54,873 096 390 Total liabilities 82,271 096 1,310 Stockholders' equity 70,161 096 1,919 Total liabilities and equity $152,432 096 $3,229 ៖៖៖៖៖៖៖

Compare Income Statements and Balance Sheets of Competitors a. Following are selected income statements from two pharmaceutical companies, Pfizer and Dr. Reddy's, for their respective 2018 fiscal years. Express each income statement amount as a percentage of sales. Note: Round percentage to one decimal point (for example, round 18.566% to 18.6%). Income Statement ($ millions) Sales Pfizer Dr. Reddy's $46,136 0% $1,876 0% Cost of goods sold 11,248 096 1,009 096 Gross profit 34,888 096 867 096 Total expenses Net income 26,841 $8,047 09 096 878 $(11) 096 096 b. Following are selected balance sheets from two pharmaceutical companies, Pfizer and Dr. Reddy's, for their respective 2018 fiscal years. Express each balance sheet amount as a percentage of total assets. Note: Round percentage to one decimal point (for example, round 18.566% to 18.6%). Balance Sheet ($ millions) Pfizer Dr. Reddy's Current assets $42,936 0% $1,448 096 Long-term assets 109,496 096 1,781 Total assets $152,432 096 $3,229 Current liabilities $27,398 096 $920 Long-term liabilities 54,873 096 390 Total liabilities 82,271 096 1,310 Stockholders' equity 70,161 096 1,919 Total liabilities and equity $152,432 096 $3,229 ៖៖៖៖៖៖៖

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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i. Use the information available in Income and Financial position statementin Part A and calculate the following ratios for DavidCompetitors Average• Net profit margin 28%• Gross profit margin 65%• Current ratio 2.10x• Acid test ratio 1.50x• Accounts receivable collection period 47 days• Accounts payable payment period 65 days Net Profit Margin = Net Income/ Sales = 350/2300 = 15.22% Gross Profit = Sales Revenue + Ending Inventory - Purchases less purchase returns = 2300 + 250 - 1100 = 1450 Gross Profit Margin = Gross Profit/ Sales = 1450/2300 = 63.04% Current Ratio = Current Assets/ Current Liabilities Current Assets = Cash + Bank + Accounts Receivable + Inventory = 4050 + 17100 + 400 + 250 = 21800 Current Liabilities = Accounts Payable = 700 Current Ratio = 21800/700 = 31.14:1 please answer this QUESTION :ii. Assuming David’s competitor’s ratio averages are as stated above:Analyse his performance with reference to each of the ratios calculatedin comparison to those of her…
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