Comprehensive Ratio Analysis Data for Lozano Chip Company and its industry averages follow. Lozano Chip Company: Balance Sheet as of December 31, 2019 (Thousands of Dollars) Cash $ 230,000 Accounts payable $ 600,000 Receivables 1,575,000 Notes payable 100,000 Inventories 1,160,000 Other current liabilities 525,000 Total current assets $2,965,000 Total current liabilities $1,225,000 Net fixed assets 1,350,000 Long-term debt 400,000 Common equity 2,690,000 Total assets $4,315,000 Total liabilities and equity $4,315,000 Lozano Chip Company: Income Statement for Year Ended December 31, 2019 (Thousands of Dollars) Sales $7,500,000 Cost of goods sold 6,375,000 Selling, general, and administrative expenses 931,000 Earnings before interest and taxes (EBIT) $ 194,000 Interest expense 40,000 Earnings before taxes (EBT) $ 154,000 Federal and state income taxes (25%) 38,500 Net income $ 115,500 Calculate the indicated ratios for Lozano. Do not round intermediate calculations. Round your answers to two decimal places. Ratio Lozano Industry Average Current assets/Current liabilities 2.0 Days sales outstanding (365-day year) days 35.0 days COGS/Inventory 6.7
Comprehensive Ratio Analysis Data for Lozano Chip Company and its industry averages follow. Lozano Chip Company: Balance Sheet as of December 31, 2019 (Thousands of Dollars) Cash $ 230,000 Accounts payable $ 600,000 Receivables 1,575,000 Notes payable 100,000 Inventories 1,160,000 Other current liabilities 525,000 Total current assets $2,965,000 Total current liabilities $1,225,000 Net fixed assets 1,350,000 Long-term debt 400,000 Common equity 2,690,000 Total assets $4,315,000 Total liabilities and equity $4,315,000 Lozano Chip Company: Income Statement for Year Ended December 31, 2019 (Thousands of Dollars) Sales $7,500,000 Cost of goods sold 6,375,000 Selling, general, and administrative expenses 931,000 Earnings before interest and taxes (EBIT) $ 194,000 Interest expense 40,000 Earnings before taxes (EBT) $ 154,000 Federal and state income taxes (25%) 38,500 Net income $ 115,500 Calculate the indicated ratios for Lozano. Do not round intermediate calculations. Round your answers to two decimal places. Ratio Lozano Industry Average Current assets/Current liabilities 2.0 Days sales outstanding (365-day year) days 35.0 days COGS/Inventory 6.7
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Comprehensive Ratio Analysis
Data for Lozano Chip Company and its industry averages follow.
| Lozano Chip Company: Balance Sheet as of December 31, 2019 (Thousands of Dollars) |
||||
| Cash | $ 230,000 | Accounts payable | $ 600,000 | |
| Receivables | 1,575,000 | Notes payable | 100,000 | |
| Inventories | 1,160,000 | Other current liabilities | 525,000 | |
| Total current assets | $2,965,000 | Total current liabilities | $1,225,000 | |
| Net fixed assets | 1,350,000 | Long-term debt | 400,000 | |
| Common equity | 2,690,000 | |||
| Total assets | $4,315,000 | Total liabilities and equity | $4,315,000 |
| Lozano Chip Company: Income Statement for Year Ended December 31, 2019 (Thousands of Dollars) |
|
| Sales | $7,500,000 |
| Cost of goods sold | 6,375,000 |
| Selling, general, and administrative expenses | 931,000 |
| Earnings before interest and taxes (EBIT) | $ 194,000 |
| Interest expense | 40,000 |
| Earnings before taxes (EBT) | $ 154,000 |
| Federal and state income taxes (25%) | 38,500 |
| Net income | $ 115,500 |
- Calculate the indicated ratios for Lozano. Do not round intermediate calculations. Round your answers to two decimal places.
Ratio Lozano Industry Average Current assets/Current liabilities 2.0 Days sales outstanding (365-day year) days 35.0 days COGS/Inventory 6.7 Sales/Fixed assets 12.1 Sales/Total assets 3.0 Net income/Sales % 1.2 % Net income/Total assets % 3.6 % Net income/Common equity % 9.0 % Total debt/Total assets % 10.0 % Total liabilities/Total assets % 60.0 % - Use the extended DuPont equation to calculate ROE for both Lozano and the industry. Do not round intermediate calculations. Round your answers to two decimal places.
For the firm, ROE is %.
For the industry, ROE is %.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education