easePROBLEM 17-15 Effects of Transactions on Various Financial Ratios [LO2, LO3. L0your choice. In all cases, assume that the current assets exceed current liabilities both before andthe effect in terms of increase, decrease, or no effect on the ratio involved, and give the reason forIndicate the effect that each transaction or event would have on the ratio listed opposite to it. StateIn the right-hand column below, certain financial ratios are listed. To the left of each ratio is a businesstransaction or event relating to the operating activities of Graham Company.Business Transaction or EventRatioDebt-to-equity ratioEarnings per shareAcid-test ratio1. Inventory was sold for cash at a profit.2. Land was purchased for cash.3. Inventory was sold on account at cost.4. Some accounts payable were paid off.5. A customer paid an overdue bill.6. A cash dividend was declared, but not yet paid.7. A previously declared cash dividend was paid.8. The company's common stock price increased.9. The company's common stock price increased and earningsper share remained unchanged.10. Property was sold for a profit.11. Obsolete inventory was written off as a loss.12. Bonds were sold with an interest rate less than the company'sWorking capitalAverage collection periodCurrent ratioCurrent ratioBook value per shareDividend yield ratioReturn on total assetsInventory turnover ratioReturn on commonstockholders' equityDividend payout ratioreturn on assets.13. The company's common stock price decreased and thedividend paid per share remained the same.14. The company's net income decreased, but long-term debtremained unchanged.15. An uncollectible account was written off against the Allowancefor Bad Debts.16. Inventory was purchased on credit.17. The company's common stock price increased and earnings ·per share remained unchanged.18. The company paid off some accounts payable.Times interest earnedCurrent ratioAcid-test ratioPrice-earnings ratioDebt-to-equity ratioRequired:after the event or transaction. Use the following format for your answers:Effect on RatioReason for Increase, Decrease, or No Effecr1.2.Etc.

NOTE : As per BARTLEBY guidelines, when multiple questions are given then first question is to be…

Jeft of each ratio is a busine Hồn or event relating to the operating activities of Graham Company. Ratio Business Transaction or Event 1. Inventory was sold for cash at a profit. 2. Land was purchased for cash. 3. Inventory was sold on account at cost. 4. Some accounts payable were paid off. Debt-to-equity ratio Earnings per share Acid-test ratio 5. A customer naid an

Jeft of each ratio is a busine Hồn or event relating to the operating activities of Graham Company. Ratio Business Transaction or Event 1. Inventory was sold for cash at a profit. 2. Land was purchased for cash. 3. Inventory was sold on account at cost. 4. Some accounts payable were paid off. Debt-to-equity ratio Earnings per share Acid-test ratio 5. A customer naid an

Personal Finance

13th Edition

ISBN:9781337669214

Author:GARMAN

Publisher:GARMAN

Chapter3: Financial Statements, Tools, And Budgets

Section: Chapter Questions

Problem 3DTM

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Methodology:• Based on the above information the consulting group will conduct ratio analysis for the following ratios:o Current ratio o Receivable’s turnover o Times’s interest earned o Profit margin o Days in inventory o Return on assets o Cash current debt coverage ratio • As a next step the group will compare the ratios calculated above with industry benchmarks. The benchmarks are indicated within brackets besides each ratio.o Current ratio (3 to 1) o Receivable’s turnover (13 times) o Times’s interest earned (9 times) o Profit margin (12%) o Days in inventory (50 days) o Return on assets (12%) o Cash current debt coverage ratio (2 times
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Chapter 24 discusses various methods of analyzing financial statements in terms of calculating ratios. Specifically, Return on Assets (ROA) is a very simple calculation: ROA= Net Income/Average Total Assets. Another method at arriving at this ratio is the DuPont Equation that was discussed in your textbook. In looking at the DuPont Equation, what benefits are derived by using this method rather than the most typical method that I have described above?
12. Which two ratios multiplied by each other equal Return on Total Assets? (A) Profit Margin (B) Return on Equity (C) Current Ratio (D) Price Earnings Ratio (E) Total Asset Turnover
Effect of transactions on various financial ratios Indicate the effect that eachtransaction/event listed here will have on the financial ratio listed opposite it, and provide an explanation for your answer. Use 1 for increase, − for decrease, and (NE) for no effect. Assume that current assets exceed current liabilities in all cases, bothbefore and after the transaction/event.Transaction/Event Financial Ratioa. Split the common stock 2 for 1.b. Collected accounts receivable.c. Issued common stock for cash.d. Sold treasury stock.e. Accrued interest on a note receivable.f. Sold inventory on account.g. Wrote off an uncollectible account.h. Declared a cash dividend.i. Incurred operating expenses.j. Sold equipment at a loss.Book value per share of common stockNumber of days’ sales in accounts receivableTotal asset turnoverReturn on equityCurrent ratioAcid-test ratioAccounts receivable turnoverDividend yieldMarginEarnings per share
Need help in a and b . THANKS
Required: (a) You are required to calculate the following ratios:(i) Gross profit margin(ii) Operating profit margin(iii) Expenses to sales(iv) Return on Capital Employed(v) Asset turnover(vi) Non-current asset turnover(vii) Current Ratio(viii) Quick Ratio(ix) Inventory days(x) Receivables days(xi) Payable days(xii) Interest cover (b) In light of your calculations comment on the performance of the company over thelast two years.
Q2: MULTIPLE-CHOICE QUESTIONS – Financial Ratios Analysis 1- In order to assess a company's ability to fulfill its long-term obligations, an analyst would most likely examine: A. activity ratios. B1. Solvency ratio ç. liquidity ratios.
Q: Choose all that apply: The following ratios may be impacted by the adoption of the new standard: A. Revenue growth B. Net margin C. Return on equity D. Price to earnings multiples E. Return on assets F. Debt to equity G. Current ratio The Question is: Why "Debt to equity" and "Current ratios" may be impacted?
_______ ratios are used to measure the speed in which various assets are converted into sales or cash. A Debt (aka Leverage) B Efficiency (aka working capital) C Profitability C Coverage
Which statement is correct? O A. current ratio 1.00 D. gross margin > net margin