Lozano Chip Company: Balance Sheet as of December 31, 2019 (Thousands of Dollars) Cash Receivables Inventories Total current assets Net fixed assets $ 210,000 1,575,000 1,115,000 $2,900,000 1,315,000 Sales/Fixed assets Sales/Total assets Accounts payable Notes payable Other current liabilities Total current liabilities Long-term debt Common equity Total liabilities and equity Total assets $4,215,000 Lozano Chip Company: Income Statement for Year Ended December 31, 2019 (Thousands of Dollars) Sales Cost of goods sold Selling, general, and administrative expenses Earnings before interest and taxes (EBIT) Interest expense Earnings before taxes (EBT) Federal and state income taxes (25%) Net income Net income/Sales Net income/Total assets Net income/Common equity Total debt/Total assets Total liabilities/Total assets a. Calculate the indicated ratios for Lozano. Do not round intermediate calculations. Round your answers to two decimal places. Ratio Lozano Industry Average Current assets/Current liabilities 2.0 Days sales outstanding (365-day year) 35.0 days 6.7 COGS/Inventory 2.32 76.65 5.72 5.66 1.78 1.56 2.81 4.62 9.8 days % % % $ 600,000 100,000 550,000 $1,250,000 400,000 2,565,000 $4,215,000 % 12.1 $7,500,000 6,375,000 927,000 $ 198,000 40,000 $ 158,000 39,500 $ 118,500 3.0 1.2% 3.6% 9.0% 10.0% 60.0% 38.88 % b. Use the extended DuPont equation to calculate ROE for both Lozano and the industry. Do not round intermediate calculations. Round your answers to two decimal places.
Lozano Chip Company: Balance Sheet as of December 31, 2019 (Thousands of Dollars) Cash Receivables Inventories Total current assets Net fixed assets $ 210,000 1,575,000 1,115,000 $2,900,000 1,315,000 Sales/Fixed assets Sales/Total assets Accounts payable Notes payable Other current liabilities Total current liabilities Long-term debt Common equity Total liabilities and equity Total assets $4,215,000 Lozano Chip Company: Income Statement for Year Ended December 31, 2019 (Thousands of Dollars) Sales Cost of goods sold Selling, general, and administrative expenses Earnings before interest and taxes (EBIT) Interest expense Earnings before taxes (EBT) Federal and state income taxes (25%) Net income Net income/Sales Net income/Total assets Net income/Common equity Total debt/Total assets Total liabilities/Total assets a. Calculate the indicated ratios for Lozano. Do not round intermediate calculations. Round your answers to two decimal places. Ratio Lozano Industry Average Current assets/Current liabilities 2.0 Days sales outstanding (365-day year) 35.0 days 6.7 COGS/Inventory 2.32 76.65 5.72 5.66 1.78 1.56 2.81 4.62 9.8 days % % % $ 600,000 100,000 550,000 $1,250,000 400,000 2,565,000 $4,215,000 % 12.1 $7,500,000 6,375,000 927,000 $ 198,000 40,000 $ 158,000 39,500 $ 118,500 3.0 1.2% 3.6% 9.0% 10.0% 60.0% 38.88 % b. Use the extended DuPont equation to calculate ROE for both Lozano and the industry. Do not round intermediate calculations. Round your answers to two decimal places.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Lozano Chip Company: Balance Sheet as of December 31, 2019
(Thousands of Dollars)
Cash
Receivables
Inventories
Total current assets
Net fixed assets
$ 210,000
1,575,000
1,115,000
$2,900,000
1,315,000
Sales/Fixed assets
Sales/Total assets
$4,215,000
Accounts payable
Notes payable
Other current liabilities
Total current liabilities
Long-term debt
Common equity
Total liabilities and equity
Total assets
Lozano Chip Company: Income Statement for Year Ended December 31,
2019
(Thousands of Dollars)
Sales
Cost of goods sold
Selling, general, and administrative expenses
Earnings before interest and taxes (EBIT)
Interest expense
Earnings before taxes (EBT)
Federal and state income taxes (25%)
Net income
Net income/Sales
Net income/Total assets
Net income/Common equity
Total debt/Total assets
Total liabilities/Total assets
a. Calculate the indicated ratios for Lozano. Do not round intermediate calculations. Round your answers to two decimal places.
Ratio
Lozano Industry Average
Current assets/Current liabilities
2.0
Days sales outstanding (365-day year)
35.0 days
6.7
COGS/Inventory
2.32
76.65
5.72
5.66
1.78
1.56
2.81
4.62
9.8
38.88
& 3
days
%
%
$ 600,000
100,000
550,000
%
%
$1,250,000
400,000
2,565,000
$4,215,000
12.1
$7,500,000
6,375,000
927,000
$ 198,000
40,000
$ 158,000
39,500
$ 118,500
3.0
1.2%
3.6%
9.0%
10.0%
60.0%
%
b. Use the extended DuPont equation to calculate ROE for both Lozano and the industry. Do not round intermediate calculations. Round your answers to two decimal places.
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