Exercise 5-14 Computing and analyzing acid-test and current ratios LO A1Case XCase Y%24Case z$1,300700CashShort-term investmentsCurrent receivablesInventoryPrepaid expenses$ 2,5502602905406502,2504002,0803,200900700Total current assets$ 5,490$ 3,580$ 6,750Current liabilities$ 2,280$ 1,350$ 3,700Compute the current ratio and acid-test ratio for each of the following separate cases.Current RatioChoose Numerator:Choose Denominator:Current RatioCurrent ratioCase Xto 1Case Yto 1Case Zto 1Acid-Test RatioChoose Numerator:Choose Denominator:Acid-Test RatioAcid-test ratioCase Xto 1to 1Case Yto 1Case ZI

Current ratio is a type of liquidity ratio that measures the ability of the company in order to pay…

Answered: Exercise 5-14 Computing and analyzing…

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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7 Problem 8-9B (Algo) Calculate and analyze ratios (LO8-6) View previous attempt 3 points Ferris Air Selected financial data regarding current assets and current liabilities for Ferris Air and Oceanic Airlines are provided as follows: ($ in millions) Oceanic Airlines Current assets: Cash and cash equivalents $1,135 $3,784 Current investments 3,014 1,261 Net receivables 721 1,754 eBook Inventory 435 298 Other current assets 180 547 Total current assets $5,485 $7,644 Current liabilities: References Current debt $6,779 $6,691 Accounts payable 2,582 2,317 Other current liabilities 0 1,514 Total current liabilities $9,361 $10,522 Required: Mc Graw Hill 1-a. Calculate the current ratio for Ferris Air and Oceanic Airlines. 1-b. Which company has the more favorable current ratio? 2-a. Calculate the acid-test (quick) ratio for Ferris Air and Oceanic Airlines. 2-b. Which company has the more favorable acid-test ratio? Complete this question by entering your answers in the tabs below. Req 1A Req…
Required Information Problem 12-6B Use ratios to analyze risk and profitability (LO12-3, 12-4) (The following information applies to the questions displayed below.] Income statement and balance sheet data for The Athletic Attic are provided below. THE ATHLETIC ATTIC Incone Statements For the years ended December 31 2022 $12, see, eee 8, 150,eee 4,350,000 2021 Net sales Cost of goods sold Gross profit Expenses: Operating expenses bepreciation expense Interest expense Income tax expense Total expenses $11,0se,000 6,900,000 4,150,000 1,750,eee 200,000 55,000 58e,e00 2,585,000 $ 1,765,000 1,700,000 200, e00 55,000 500,000 2,455,e00 $ 1,695,000 Net incone THE ATHLETIC ATTIC Balance Sheets December 31 2022 2021 2020 Assets Current assets: Cash Accounts receivable Inventory Supplics Long term assets: Equipnent Less: Accumulated depreciation $ 240,000 1,005,000 1,740,000 145,800 170,000 755,000 1,370,000 115,000 234,000 775,00e 1,048,eee 90,000 1,700,000 (75e,00e) 1,700,000 (S5e,000)…
Safari 4:22 PM Tue Jan 30 < HW Set 1 (Ch 2 and 3) Template Calibri (Body) fx Enter text or formula here A 1 E 2.16 2 Information for Montgomery, Inc. 3 4 5 6 7 Cash 8 Accounts Receivable 9 Inventory 10 PP&E, net 11 Goodwill NOPAT for 2020 12 Other operating assets 13 A/P 14 Accrued Expenses and other 15 Unearned revenues 16 Long-term debt 17 Common stock 18 19 20 a. 21 NOA for 2019 22 NOA for 2020 23 24 b. 25 26 27 28 29 30 31 32 33 34 35 Retained earnings 2020 FCF E 2.16 E 2.17 E 3.15 11 B HE E 3.18 Home Insert $ BIU C 3,150 2019 3,590 5,650 10,240 21,840 13,160 3,450 10,400 10,350 3,120 7,680 18,840 7,540 + Draw Page Layout ABC 2020 4,260 8,340 11,460 26,110 14,310 4,720 13,310 13,740 4,770 8,350 18,930 10,100 ch LL F Formulas Data G Review View General H < E < H: AH L O M Σ ☎: 50% |||| O
Present Value of $1 Periods 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% 8.00% 9.00% 10.00% 1 0.990 0.980 0.971 0.962 0.952 0.943 0.935 0.926 0.917 0.909 2 0.980 0.961 0.943 0.907 0.907 0.890 0.873 0.857 0.842 0.826 3 0.971 0.942 0.915 0.889 0.864 0.840 0.816 0.794 0.772 0.751 4 0.961 0.924 0.888 0.855 0.823 0.792 0.763 0.735 0.708 0.683 5 0.951 0.906 0.863 0.822 0.784 0.747 0.713 0.681 0.650 0.621 6 0.942 0.888 0.837 0.790 0.746 0.705 0.666 0.630 0.596 0.564 7 0.933 0.871 0.813 0.760 0.711 0.665 0.623 0.583 0.547 0.513 8 0.923 0.853 0.789 0.731 0.677 0.627 0.582 0.540 0.502 0.467 9 0.914 0.837 0.766 0.703 0.645 0.592 0.544 0.500 0.460 0.424 10 0.905 0.820 0.744 0.676 0.614 0.558 0.508 0.463 0.422 0.386 Present Value of Ordinary Annuity of $1 Periods 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% 8.00% 9.00% 10.00% 1 0.990 0.980 0.971 0.962 0.952 0.943 0.935 0.926 0.917 0.909 2 1.970 1.942 1.913 1.886 1.859 1.833 1.808 1.783 1.759 1.736 3 2.941 2.884…
w/ ル 16 AaBbCcDc AaBbCcDc AABBCC AABBCCC A 1 Normal 1 No Spac... Heading 1 Heading 2 , 三 Paragraph Styles The appropriate ratios for the company. 2018 2017 current ratio = 4.26470 4.82510 acid test ratio = 1.18602 1.43199 %3D days sales uncollected = net profit margin = 8.29954 1.87842 1.26872 gross profit margin debt to equity ratio = = 9.78681 8.15187 0.38634 0.38720 debt ratio = 0.62956 0.63186 equity ratio = 0.37044 0.36814 interest coverage ratio 6.50636 The Plan The Company is considering opening a new store. The directors of the company have contracted op nou an assessment of the financial performance of the company over the two (2) year period 2017 to 2018. Required: 1. Write a report to the Board of Directors on the performance of the company over the two years, highlighting areas of concern. 2. Would you recommend the opening of a new store? X. Ed 27° acer
Ratios Calculated Year 1 Year 2 3.64 +Q+ Price-to-cash-flow 5.20 Inventory turnover 10.40 Debt-to-equity 0.70 8.32 0.56 Year 3 2.91 6.66 0.45 Based on the preceding information, your calculations, and your assumptions, which of the following statements can be included in your analysis report? Check all that apply. Cold Goose Metal Works Inc.'s ability to meet its debt obligations has improved since its debt-to-equity ratio decreased from 0.70 to 0.45. A decline in the inventory turnover ratio can be explained by the new Inventory management system that the company recently adopted, which led to more efficient inventory management. A decline in the debt-to-equity ratio implies a decline in the creditworthiness of the firm. A plausible reason why Cold Goose Metal Works Inc.'s price-to-cash-flow ratio has decreased is that investors expect lower cash flow per share in the future.
Camaro GTO Torino Cash $ 2,400 $ 230 $ 1,300 Short-term investments 0 0 600 Current receivables 260 510 500 Inventory 2,175 2,020 3,050 Prepaid expenses 300 600 900 Total current assets $ 5,135 $ 3,360 $ 6,350 Current liabilities $ 2,220 $ 1,320 $ 3,550 a. Compute the acid-test ratio for each of the separate cases above.b. Which company is in the best position to meet short-term obligations?
Camaro GTO Torino Cash $ 2,350 $ 220 $ 1,200 Short-term investments 0 0 700 Current receivables 250 500 450 Inventory 2,150 2,000 3,000 Prepaid expenses 300 600 900 Total current assets $ 5,050 $ 3,320 $ 6,250 Current liabilities $ 2,200 $ 1,310 $ 3,500 Compute the acid-test ratio for each of the separate cases above.
Tableau Dashboard Activity 12-1 Use Conservative Versus Aggressive Accounting Estimates Review the Tableau visualization, and then answer the questions that follow. Sales Revenue Cost of Goods Sold Depreciation Exp Bad Debt Exp Warranty Exp Income Statement Net Income $80,000 $0 $50,000 $100,000 $150,000 $200,000 Balance Sheet Cash Accounts Receivable Allowance for Uncol Accts Inventory Equipment Accum Depr Total Assets Accounts Payable Warranty Liab Common Stock Retained Earnings Total Liab and Equities Operating Cash Flows Investing Cash Flows Financing Cash Flows $275,000 Uncollectible Accounts Estimate Ⓒ Before Adjustment 5% of Accounts Receivable 15% of Accounts Receivable Lower of Cost or NRV Estimate Ⓒ Before Adjustment Ⓒ $4,000 NRV Below Cost $12,000 NRV Below Cost Depreciation Estimate Before Adjustment 6 Years 12 Years Warranty Estimate Before Adjustment 4% of Sales Revenue 12% of Sales Revenue Risk Analysis Current Ratio Debt-to-Equity Rat.. 10.3 5.8% Profitability Analysis…
Company Comparison Tesla GM Ford Toyota Current Ratio 1.24 1.07 1.16 1.04 Total asset 0.77 0.60 0.60 0.59 turnover ratio Debt ratio 0.80 0.81 1.92 4.83 Gross profit 16.55% 10.18% 13.60% 10.01% margin P/E ratio N/A 8.15 N/A 7.81 The company with the best debt ratio, P/E ratio, and total asset turnover ratio is: Select one: O a. GM O b. Ford ○ c. Toyota O d. Tesla

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