In analyzing the financial statements which are given can you please compute the following ratios: 1.GROSS PROFIT RATE 2.RATE OF RETURN ON OWNER'S EQUITY 3. AVERAGE COLLECTION PERIOD 4. EARNINGS PER SHARE 5.BOOK VALUE PER SHARE
In analyzing the financial statements which are given can you please compute the following ratios: 1.GROSS PROFIT RATE 2.RATE OF RETURN ON OWNER'S EQUITY 3. AVERAGE COLLECTION PERIOD 4. EARNINGS PER SHARE 5.BOOK VALUE PER SHARE
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Concept explainers
Financial Ratios
A Ratio refers to a figure calculated as a reference to the relationship of two or more numbers and can be expressed as a fraction, proportion, percentage, or the number of times. When the number is determined by taking two accounting numbers derived from the financial statements, it is termed as the accounting ratio.
Return on Equity
The Return on Equity (RoE) is a measure of the profitability of a business concerning the funds by its stockholders/shareholders. ROE is a metric used generally to determine how well the company utilizes its funds provided by the equity shareholders.
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In analyzing the financial statements which are given can you please compute the following ratios:
1.GROSS PROFIT RATE
2.RATE OF RETURN ON OWNER'S EQUITY
3. AVERAGE COLLECTION PERIOD
4. EARNINGS PER SHARE
5.BOOK VALUE PER SHARE
Transcribed Image Text:ASSETS
Current Assets:
Cash
Marketable Securities
Accounts Receivable, net
Finished Goods
Work in Process
Raw Materials.
Factory Supplies
Prepaid Expenses
Total Current Assets
Investments
Property, Plant and Equipment, net of depreciation
Total Assets
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts Payable
Income Taxes Payable
Accrued Expenses
Total Current Liabilities
Noncurrent Liabilities: 00.000,8
Mortgage Loans Payable
Total Liabilities
Stockholders' Equity
12% Preferred Stock, Par 10.00
Common Stock, Par 10.00
Premium on Preferred Stock
Premium on Common Stock
Total Paid-in Capital
Retained Earnings
Mayo Manufacturing Corp.
Balance Sheet
Total Stockholders' Equity
Total Liabilities and Stockholders' Equity
Additional Information:
Market Value per Share of Common Stock
Net Credit Sales
Net Credit Purchases
Dividends on Preferred Stock
Dividends on Common Stock
December 31, 2019 figures:
Accounts Receivable.
12,000.00
80,000.00
50,000.00
25,000.00
60,000.00
160,000.00
60,000.00
The marketable securities qualify as cash equivalents.
Total Current Assets
Total Current Liabilities.
Common Stock
Operating Expenses
Total Assets
Stockholders' Equity
December 31
2021
15,500.00
5,000.00
25,000.00
24,000.00
16,000.00
12,000.00
1,200.00
1,800.00
100,500.00
25,000.00
75,000.00
200,500.00
15,000.00
19,250.00
5,000.00
39,250.00
60,000.00
99,250.00
20,000.00
30,000.00
5,000.00
10,000.00
65,000.00
36,250.00
65
200,000.00
40,000.00
2020
2021
2,400.00
19,100.00
12,200.00
16,000.00
15,000.00
26,000.00
13,500.00
8,000.00
2,000.00
2,300.00
95,000.00
20,000.00
60,000.00
175,000.00
22,000.00
14,000.00
9,000.00
45,000.00
58,000.00
22,000.00
101,250.00 80,000.00
200,500.00
175,000.00
50,000.00
95,000.00
20,000.00
25,000.00
5,000.00
8,000.00
60
180,000.00
30,000.00
2020
2,400.00
15,200.00
Transcribed Image Text:Comprehensive Problem:
The Mayo Manufacturing Corporation has given you the following statements for analysis:
Sales00.000.00
Less: Cost of Goods Sold, per schedule
Gross Profit on Sales
Schedule of Cost of Goods Sold:
Direct Materials Cost:
Less: Operating Expenses (including depreciation, 6,000.00)
Income Before Income Tax
Less: Provision for Income Tax
Net Income
Inventory, January 1
Purchases
Inventory, December 31
Direct Materials Cost
Mayo Manufacturing Corp.
Income Statements
2020 and 2021
Manufacturing Costs
Work in Progress, January 100.00
Work in Progress, December 31
Cost of Goods Manufactured as
Finished Goods, January 1s.100
Finished Goods, December 31005
Cost of Goods Sold
Direct Labor
Factory Overhead (including depreciation 5,000 for 2021 and
3,000 for 2000)00.000,00
00.000,081
00.000,08
300,000.00
nobsbarqsh to ten drom 120,000.00
180,000.00
2021
YTIUD
2020
21322A
200,000.00
100,000.00
100,000.00
125,000.00
60,000.00
55,000.00 001 40,000.00
19,250.00
14,000.00
35,750.00
26,000.00
00.019 bb012 bon
8,000.00
13,040.00 ubnicki
54,000.00
47,560.00
(12,000.00) (8,000.00)
50,000.00
52,600.00
40,500.00 32,000.00 12
30,000.000 24,000.00
120,500.00
108,600.00
13,500.00
6,900.00
(16,000.00)
118,000.00
yup3 26,000.00
vslup3 amablon (24,000.00)
120,000.00
(13,500.00)
102,000.00
24,000.00
(26,000.00)
100,000.00
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