I need to find the Quality of Income, Times interest earned ratio and Cash coverage ratio for Blue Water and Prime Fish.
I need to find the Quality of Income, Times interest earned ratio and Cash coverage ratio for Blue Water and Prime Fish.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
I need to find the Quality of Income, Times interest earned ratio and Cash coverage ratio for Blue Water and Prime Fish.
![Required:
1. Complete a schedule that reflects a ratio analysis of each company. (Round your intermediate calculations and final answers to 2
decimal places. Enter percentage answers rounded to 2 decimal places (i.e. 0.1234 should be entered as 12.34).)
BLUE WATER
PRIME FISH
COMPANY
Ratio
COMPANY
Profitability ratios:
13.60 %
8.20 %
45.44 %
11.45 %
9.72 %
49.45 %
1.
Return on equity
2.
Return on assets
3.
Gross profit percentage
4.
Net profit margin
7.89 %
10.11 %
5.
Earnings per share
$
2.22
1.54
6.
Quality of income
Asset turnover ratios:
7.
Total asset turnover
1.04
0.96
8.
Fixed asset turnover
2.82
1.93
9.
Receivable turnover
5.10
11.77
10.
Inventory turnover
2.50
8.83
Liquidity ratios:
11.
Current ratio
1.89
1.59
12.
Quick ratio
0.89
0.86
13.
Cash ratio
0.44
0.32
Solvency ratios:
14.
Times interest earned ratio
15.
Cash coverage ratio
16.
Debt/equity ratio
0.66
0.18
Market ratios:
17.
Pricelearnings ratio
10.31
15.58
18.
Dividend yield ratio
9.61 %
12.21 %](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc172220c-b8c6-4fe6-be57-f2666808bc01%2Fac7bd7bb-4c67-42b0-b52c-5cbf57f51318%2Fjq7r88i_processed.png&w=3840&q=75)
Transcribed Image Text:Required:
1. Complete a schedule that reflects a ratio analysis of each company. (Round your intermediate calculations and final answers to 2
decimal places. Enter percentage answers rounded to 2 decimal places (i.e. 0.1234 should be entered as 12.34).)
BLUE WATER
PRIME FISH
COMPANY
Ratio
COMPANY
Profitability ratios:
13.60 %
8.20 %
45.44 %
11.45 %
9.72 %
49.45 %
1.
Return on equity
2.
Return on assets
3.
Gross profit percentage
4.
Net profit margin
7.89 %
10.11 %
5.
Earnings per share
$
2.22
1.54
6.
Quality of income
Asset turnover ratios:
7.
Total asset turnover
1.04
0.96
8.
Fixed asset turnover
2.82
1.93
9.
Receivable turnover
5.10
11.77
10.
Inventory turnover
2.50
8.83
Liquidity ratios:
11.
Current ratio
1.89
1.59
12.
Quick ratio
0.89
0.86
13.
Cash ratio
0.44
0.32
Solvency ratios:
14.
Times interest earned ratio
15.
Cash coverage ratio
16.
Debt/equity ratio
0.66
0.18
Market ratios:
17.
Pricelearnings ratio
10.31
15.58
18.
Dividend yield ratio
9.61 %
12.21 %
![Blue Water
Prime Fish
Balance sheet:
$ 41,900
42,500
94,500
153,500
84,900
$ 417,300
Cash
$ 20,100
Accounts receivable (net)
Inventory
Property & equipment (net)
33,700
45,400
411,800
314,000
$ 825,000
Other assets
Total assets
94,500
71,300
154,300
29,900
67,300
$ 417,300
Current liabilities
$
Long-term debt (interest rate: 15%)
Capital stock ($10 par value)
Additional paid-in capital
Retained earnings
62,500
61,800
521,000
106,900
72,800
$ 825,000
Total liabilities and stockholders' equity
Income statement:
Sales revenue (1/2 on credit)
Cost of goods sold
Operating expenses
$ 433,500
(236,500)
(162,800)
$4
$ 793,000
(400,900)
(311,900)
$4
Net income
34,200
80, 200
Other data:
Per share stock price at end of current year
Average income tax rate
Dividends declared and paid in current year
22.9
24
45%
45%
33,900
$ 152,500](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc172220c-b8c6-4fe6-be57-f2666808bc01%2Fac7bd7bb-4c67-42b0-b52c-5cbf57f51318%2Fusprcue_processed.png&w=3840&q=75)
Transcribed Image Text:Blue Water
Prime Fish
Balance sheet:
$ 41,900
42,500
94,500
153,500
84,900
$ 417,300
Cash
$ 20,100
Accounts receivable (net)
Inventory
Property & equipment (net)
33,700
45,400
411,800
314,000
$ 825,000
Other assets
Total assets
94,500
71,300
154,300
29,900
67,300
$ 417,300
Current liabilities
$
Long-term debt (interest rate: 15%)
Capital stock ($10 par value)
Additional paid-in capital
Retained earnings
62,500
61,800
521,000
106,900
72,800
$ 825,000
Total liabilities and stockholders' equity
Income statement:
Sales revenue (1/2 on credit)
Cost of goods sold
Operating expenses
$ 433,500
(236,500)
(162,800)
$4
$ 793,000
(400,900)
(311,900)
$4
Net income
34,200
80, 200
Other data:
Per share stock price at end of current year
Average income tax rate
Dividends declared and paid in current year
22.9
24
45%
45%
33,900
$ 152,500
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