For each ratio listed, identify whether the change in ratio value from the Prior Year to the Current Year is usually regarded asfavorable or unfavorable.RatioCurrent YearPrior YearChange1. Profit margin9%55 %7%54 %2. Debt ratio3. Gross margin36 %45 %4. Acid-test ratio5. Accounts receivable turnover6. Basic earnings per share1.201.235.06.3%241.201.087. Inventory turnover8. Dividend yield5.04.94.0 %3.8 %

Financial ratios help in judging the profitability, solvency, and activity of a business…

For each ratio listed, identify whether the change in ratio value from the Prior Year te favorable or unfavorable. Ratio Current Year Prior Year Change 1. Profit margin 9% 7% 54 % 2. Debt ratio 55 % 3. Gross margin 36 % 45 % 4. Acid-test ratio 1.20 1.23 5. Accounts receivable turnover 5.0 6.3 6. Basic earnings per share 1.20 $ 1.08 7. Inventory turnover 8. Dividend yield 5.0 4.9 4.0 % 3.8 % %24

For each ratio listed, identify whether the change in ratio value from the Prior Year te favorable or unfavorable. Ratio Current Year Prior Year Change 1. Profit margin 9% 7% 54 % 2. Debt ratio 55 % 3. Gross margin 36 % 45 % 4. Acid-test ratio 1.20 1.23 5. Accounts receivable turnover 5.0 6.3 6. Basic earnings per share 1.20 $ 1.08 7. Inventory turnover 8. Dividend yield 5.0 4.9 4.0 % 3.8 % %24

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

Examine the selected data over the 5-year period as shown in the table below for Dumbledore Ltd. Item Sales Cost of sales EBIT Interest NPAT Current assets Total assets current liabilities Total liabilities Equity Gross margin Interest coverage Current ratio 2021 $m 286.41 180.03 51.18 37.07 35.13 43.85 226.18 55.99 98.99 127.19 0.37 1.38 0.78 Year 2020 $m 280.80 166.69 51.08 33.70 35.10 43.20 221.75 53.58 91.66 130.09 0.41 1.52 0.81 2019 $m 275.29 154.35 50.98 30.64 35.06 42.56 217.40 51.27 84.87 132.53 0.44 1.66 0.89 2018 $m 269.89 142.91 50.88 27.85 35.03 41.93 213.13 49.06 78.58 134.56 0.47 1.83 U.OJ 2017 $m 264.60 134.19 49.88 25.32 34.51 41.31 206.93 47.40 74.48 132.44 0.49 1.97 0.87 2016 $m 252.00 126.00 48.90 24.00 34.00 40.70 200.90 45.80 70.60 130.30 0.50 2.04 0.89
Horizontal Analysis of the Income Statement Income statement data for Winthrop Company for two recent years ended December 31, are as follows: Sales Cost of goods sold Gross profit Selling expenses Administrative expenses Total operating expenses Income before income tax Income tax expenses Net income Current Year $381,300 312,000 $69,300 $19,210 18,150 $37,360 $31,940 12,800 $19,140 Previous Year $310,000 260,000 $50,000 $17,000 15,000 $32,000 $18,000 7,200 $10,800
26. Given the following financial data for Alpha Company, calculate the ratios listed below the data. (Compute all ratios and percents to 2 decimal points.) Sales (all on credit) Cost of Goods Sold $650,000 422,500 Income before 78,000 Income Taxes Net Income 54,600 Ending Beginning Balances Balances Cash $19,500 $15,000 Accounts Receivable 65,000 59,800 (net) Merchandise 71,500 66,300 Inventory Plant and Equipment (net) 195,000 183,900 Total Assets $351,000 $325,000 Current $74,100 $100,200 Liabilities Long-Term Notes Payable 97,500 100,000 Stockholders' 179,400 124,800 Equity Total Liabilities and Stockholders' $351,000 $325,000 Equity
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.
Required: 1. Express all of the asset, liability, and sales data in trend percentages. Use Year 1 as the base year. (Round your percentage answers to 1 decimal place (i.e., 0.1234 should be entered as 12.3).) Sales Current assets: Cash Accounts receivable, net Inventory Total current assets Current liabilities Year 1 % % % % % % Year 2 % % % % % % Year 3 % % % % % % Year 4 % % % % % Year 5 % % % % %
EAST COAST YACHTS 2020 Income Statement Sales Cost of goods sold Selling, general, and administrative Depreciation EBIT Interest expense EBT Taxes (25%) Net income Dividends Retained earnings $550,424,000 397,185,000 65,778,000 17,963,000 $ 69,498,000 9,900,000 $ 59,598,000 14,899,500 $ 44,698,500 $ 19,374,500 25,324,000 Current assets Cash and equivalents Accounts receivable Inventory Other Total current assets Fixed assets Property, plant, and equipment Less accumulated depreciation Net property, plant, and equipment Intangible assets and others Total fixed assets Total assets EAST COAST YACHTS 2020 Balance Sheet $ 10,107,000 16,813,300 18,135,700 1,054,900 $ 46,110,900 $412,032,000 (102,452,000) $309,580,000 6,772,000 $316,352,000 $362,462,900 Current liabilities Accounts payable Accrued expenses Total current liabilities Long-term debt Total long-term liabilities Stockholders' equity Preferred stock Common stock Capital surplus Accumulated retained earnings Less treasury stock…
2 Tiger Audio declared and paid a cash dividend of $7,925 in the current year. Its comparative financial statements, prepared at December 31, reported the following summarized information: Current Previous Income Statement $342,000 $281,000 175,650 166,350 63,600 6,400 96,350 28,905 Sales Revenue Cost of Goods Sold 159,000 122,000 52,930 5,670 63,400 19,020 Gross Profit Operating Expenses Interest Expense Income before Income Tax Expense Income Tax Expense (30%) Net Income $ 67,445 $ 44,380 Balance Sheet $ 72,520 32,900 49,000 151,000 $305,420 $ 45, 200 28,000 46,000 138, 200 Cash Accounts Receivable, Net Inventory Property and Equipment, Net Total Assets $257,400 $ 39,000 4,800 101,900 145,700 39,400 120,320 $ 37,000 4,000 116, 200 157, 200 39,400 60,800 Accounts Payable Income Tax Payable Note Payable (long-term) Total Liabilities Common Stock (par $1) Retained Earnings Total Liabilities and Stockholders' Equity $305,420 $257,400
Find the following financial ratios for LVMH Moet Hennessy Louis Vuitton SA (use year-end figures rather than average values where appropriate) (Round your answers to 2 decimal places (e.g., 32.16).) : 2015 2016 Short-term solvency ratios: Current ratio Quick ratio Cash ratio Asset utilization ratios: Total asset turnover Inventory turnover Receivables turnover Long-term solvency ratios: Total debt ratio Debt–equity ratio Equity multiplier Times interest earned ratio Profitability ratios: Profit margin % % Return on assets % % Return on equity % %
Definitional problems: Listed are 11 terms that relate to ratio analysis:1. Book value per share2.Inventoryturnover3. Debt-to-equity ratio4. Average collection period5. Average sales period6. Return on common equity7. Earnings per share8. Price/earnings ratio9. Return on total assets10. Current ratio11. Accounts-receivable turnoverChoose the financial ratio or term from the list that most appropriately completes each of the following statements:1. The__________ tends to have an effect on the market price per share asreflected in the price/earnings ratio.2. The__________ indicates whether a stock is relatively cheap or relativelyexpensive in relation to current earnings. 3. The________ measures the amount that would be distributed to holders of common stock if all assets were sold at their balance-sheet carrying amount and if all creditors were paid off.4. The_____________ is a rough measure of how many times a company'saccounts…
Determining Gross Profit During the current year, merchandise is sold for $45,870,000. The cost of the merchandise sold is $33,026,400. a. What is the amount of the gross profit? 12,843,600 b. Compute the gross profit percentage (gross profit divided by sales). % c. When will the income statement necessarily report a net income?
Compare the performance of Fly X to the Industry. For each ratio, comment on whether Fly X is positive or negative relative to the Industry. Median Industry Fly X Ratios Current Ratio 1.43X 1.45 Quick Ratio 0.84X 0.88 Total Asset Turnover Ratio 0.85 1.30 Inventory Turnover Ratio 6.15 12.10 Average Inventory Ratio 59.35 30.17 Receivables Turnover 9.82 13.08 Average Collection Period 37.17 27.90 Debt Ratio 0.52 0.39
Requirement 1. Compute these ratios: Working Capital Current Debt-to- Ratio Cash Ratio Debt Ratio Equity Ratio Round ratios to two 14.44 212400 7.73 decimal places or format as percentages or Accounts Days Sales currency as appropriate. Inventory Days Sales in Gross ProfitReceivable in Turnover Inventory Percentage Turnover Receivables 2019 Total Assets = Rate of Rate of Asset Return on Return on Turnover Stockholders' Earnings Total Assets Ratio Equity Per Share 2019 SHE = Price/ Earnings *Current Stock Price is Dividend $10.00 per share Ratio* Dividend Yield Payout Dividend per share= Requirement 2. Based on the ratios computed above, analyze the company's ability to pay its debts (both current and long term). Refer to at least 3 specific ratios in your analysis. Requirement 3: Based on the ratios computed above, analyze the company's management of inventory. Refer to at least 2 specific ratios in your analysis. Requirement 4: Based on the ratios computed above, analyze the company's…