Computing and Interpreting Financial Statement RatiosFollowing are selected ratios of Colgate-Palmolive for 2015 and 2014.Return on Assets(ROA) Component 20152014Profitability (Net income/Sales)7.80% 11.30%Productivity (Sales/Average assets)1.371.28a. Was the company profitable in 2015? What evidence do you have of this?ONo, Colgate-Palmolive was not profitable as evidenced by its decrease in its net profit margin.OYes, Colgate-Palmolive was profitable as evidenced by its positive net profit margin.b. Is the change in productivity (asset turnover) a positive development?ONo, the increase indicates more operating assets were needed to generate the same level of sales as the prior year.OYes, the increase indicates that operating assets generated a higher level of sales than the prior year.c. Compute the company's ROA for 2015.Round answer to one decimal place (ex: 0.2345 = 23.5%).

a. Yes, Colgate Palmolive was profitable in year 2015 as evidenced by its positive net profit margin…

Answered: Computing and Interpreting Financial…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

These are the current ratios for Facebook INC. for the 2018 and 2017 years. Based on these numbers, how well or poorly is the company doing?
Question: What do these ratios say about a company it an automobile industry? MEASURES RATIOS 2017 2016 2015 ACTIVITY RATIOS INVENTORY TURNOVER 4.4037 3.2289 2.7986 TOTAL ASSET TURNOVER 0.4103 0.3089 0.5015 RECEIVABLES TURNOVER 23.191 20.9551 20.4567 COVERAGE RATIOS CASH COVERAGE RATIO 0.2016 2.17 -1.865 INTEREST COVERAGE RATIO -3.4649 -3.3567 -6.0296 LIQUIDITY RATIOS CURRENT RATIO 0.8561 1.0743 0.9897 QUICK RATIO 0.561 0.719 0.535 SOLVENCY RATIOS DEBT RATIO 0.8034 0.7391 0.8598 TOTAL DEBT TO EQUITY RATIO 5.4335 3.5242 6.4011 CASH PERFORMANCE RATIOS CASH RETURN TO REVENUE 0.2874 0.3279 0.3834 CASH RETURN TO ASSETS -0.002 -0.0055 -0.065 CASH RETURN TO EQUITY -0.0141 -0.0261 -0.484 PROFITABILITY RATIOS GROSS PROFIT MARGIN 0.1889 0.2285 0.2282 RETURN ON ASSET -0.0872 -0.0503 -0.1279…
What is the sustainable growth rate for 2015? Narrow Falls Lumber 2015 Income Statement Net sales Cost of goods sold Depreciation EBIT Interest Taxable income Taxes Net income Dividends Cash Accounts receivable Inventory Net fixed assets Total assets Select one: a. 10.91% b. 14.46% c. 15.54% d. 12.63% e. 13.97% $28,200 $848,600 542,800 147,400 $158,400 12,600 $145,800 51,800 $94.000 Narrow Falls Lumber Balance Sheets as of December 31, 2014 and 2015 2015 2014 $ 32,300 $ 26,900 74,700 72,300 99,500 97,800 707,100 705,000 $913.600 $902,000 Accounts payable Notes payable Long-term debt Common stock and paid-in surplus ($1 par value) Retained earnings Total liabilities & owners' equity 2015 2014 $ 78,900 $ 79,200 40,000 354,500 50,000 295,600 170,000 175,000 319.100 253,300 $913.600 $902,000
Complete a margin analysis for Associated Industries and answer the questions below. Associated Industries Year Ending Year Ending Change 2016 2017 Gross Margin 43.7% 43.7% 0% Operating Margin 3.9% 3.0% (.9%) Net Margin 3.0% 2.4% (.6%) 1. What was the change to the Operating Margin and what does that indicate for the operation of the business?
Whats the equation to find current ratio when current assets isnt given? Also how do you find debit to equity ratio in this kind of problem?
Based on this analysis how would I assess the financial stability and operational efficiency of this company? Ratio and Ratio Formula (in thousands) 2015 2014 2013 Current Industry Average Liquidity Current Ratio =Current Asset / Current Liability 9,900/6,300 1.57 1.61 1.62 1.63 Acid Test Ratio or Quick Ratio = (Cash + Marketable securities + Accounts receivable)/Current liabilities (400+300+3,200)/6,300 0.62 0.64 0.63 0.68 Solvency Times Interest Earned =Earnings before interest & taxes/interest expense, gross (7,060+900)/900 8.84 8.55 8.5 8.45 Profitability Profit margin on sales = net income/sales 7,060/30,500 14% 13.20% 12.10% 13.00% Productivity Asset turnover = sales/avg total assets 30,500/6,000+5,400)/2) 1.85 1.84 1.83 1.84 Inventory turnover = COGS/avg inv 17,600/ (6,000+5,400)/2) 3.09 3.17 3.21 3.18
By what percentage did Mydeco's revenues grow each year from 2016 to 2019? (Round to two decimal places.) By what percentage did net income grow each year? (Round to two decimal places.) Why might the growth rates of revenues and net income differ? (Round to two decimal places.)
Analyze the financials for Wal-Mart and its competitor(s) in the online market in 2012 and 2016. What do you conclude from analyzing financial ratios about the companies strategies and Walmart's competitive advantage? Revenue Cost of goods sold Gross profit SG&A and other expenses Operating income Net income Total assets Total liabilities Total equity Total assets end Total assets beginning Total liabilities end Total liabilities beginning Total equity end Total equity beginning Cost of goods sold as % of sales Gross margin SG&A as % of sales Operating income margin Net profit margin Asset turnover ROA ROE Walmart 2012 in $ millions 443,854 335,127 108,727 85,265 23,462 15,699 186,931 113,021 73,910 193,406 180,455 117,241 108,800 76,165 71,655 75.5% 24.5% 19.2% 5.3% 3.5% 2.4 8.4% 21.2% Walmart 2016 in $ millions 478,614 360,984 117,630 97,041 20,589 14,694 201,536 116,762 84,774 199,581 203,490 115,970 117,553 83,611 85,937 75.4% 24.6% 20.3% 4.3% 3.1% 2.4 7.3% 17.3% Amazon 2012 in $…

Recommended textbooks for you

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

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,

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

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

SEE MORE TEXTBOOKS