PROBLEM II Financial Ratios (Adapted from MAS Reviewer by Aljohn Lee) Lyn merchandising has 1,000,000 common shares with each share priced at P8. In 2017, the company declared dividends of PO.10 per share. The balance sheet at the end of 2017 showed approximately the same amounts as that at the end of 2016. The financial statements of Lyn Merchandising are as follows: Lyn Merchandising, Income Statement for 2017 (In thousands) Sales P4,700 Cost of Goods Sold (2,300) Gross Profit P2,400 Operating Expenses: P320 Depreciation Others 1,230 (1,550) P850 EBIT (150) P700 Interest Expense Earnings before tax (280) P420 Income Tax NET INCOME Lyn Merchandising, Balance Sheet at December 31, 2017 (In Thousands) ASSETS LIABILITIES and SHE Cash P220 Accounts Payable Accrued expenses Total Current Liab. Long-term debt Common stocks P190 Accounts Rec. 440 180 Inventory 410 P370 Total Current Ass. P1,070 1,960 1,810 430 PPE 5,600 Acsum, Dep. Total Assets (2,100) Retained earnings P4,570 Total Liab and SHE P4.5 REQUIRED: (Round answers to two decimal places) 11. Earnings Per Share 12. P/E ratio 1. Current Ratio 2. Acid-test Ratio 3. Accounts Receivable Turnover 13. Dividends Yield 4. Inventory Turnover 5. Gross Profit Margin 6. Operating Profit Margin 7. Return on Sales 8. BOA-Operational 9. BOA-Total Management performance 10. Return on Equity 14. Payout Ratio 15. Debt Ratio 16. Debt-Equity ratio 17. Times interest earned 18. Defensive Interval ratio 19. Cash flow to total debt 20. Cash flow margin
PROBLEM II Financial Ratios (Adapted from MAS Reviewer by Aljohn Lee) Lyn merchandising has 1,000,000 common shares with each share priced at P8. In 2017, the company declared dividends of PO.10 per share. The balance sheet at the end of 2017 showed approximately the same amounts as that at the end of 2016. The financial statements of Lyn Merchandising are as follows: Lyn Merchandising, Income Statement for 2017 (In thousands) Sales P4,700 Cost of Goods Sold (2,300) Gross Profit P2,400 Operating Expenses: P320 Depreciation Others 1,230 (1,550) P850 EBIT (150) P700 Interest Expense Earnings before tax (280) P420 Income Tax NET INCOME Lyn Merchandising, Balance Sheet at December 31, 2017 (In Thousands) ASSETS LIABILITIES and SHE Cash P220 Accounts Payable Accrued expenses Total Current Liab. Long-term debt Common stocks P190 Accounts Rec. 440 180 Inventory 410 P370 Total Current Ass. P1,070 1,960 1,810 430 PPE 5,600 Acsum, Dep. Total Assets (2,100) Retained earnings P4,570 Total Liab and SHE P4.5 REQUIRED: (Round answers to two decimal places) 11. Earnings Per Share 12. P/E ratio 1. Current Ratio 2. Acid-test Ratio 3. Accounts Receivable Turnover 13. Dividends Yield 4. Inventory Turnover 5. Gross Profit Margin 6. Operating Profit Margin 7. Return on Sales 8. BOA-Operational 9. BOA-Total Management performance 10. Return on Equity 14. Payout Ratio 15. Debt Ratio 16. Debt-Equity ratio 17. Times interest earned 18. Defensive Interval ratio 19. Cash flow to total debt 20. Cash flow margin
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:PROBLEM II Financial Ratios (Adapted from MAS Reviewer by Aliohn Lee)
Lyn merchandising has 1,000,000 common shares with each share priced at P8. In 2017, the company declared
dividends of PO.10 per share. The balance sheet at the end of 2017 showed approximately the same amounts as that at
the end of 2016. The financial statements of Lyn Merchandising are as follows:
Lyn Merchandising, Income Statement for 2017 (In thousands)
Sales
P4,700
Cost of Goods Sold
(2,300)
Gross Profit
P2,400
Operating Expenses:
Depreciation
P320
Others
23
(1,550)
ЕBIT
P850
Interest Expense
(150)
Earnings before tax
P700
Income Tax
(280)
NET INCOME
P420
Lyn Merchandising, Balance Sheet at December 31, 2017 (In Thousands)
ASSETS
LIABILITIES and SHE
Cash
Accounts Payable
Accrued expenses
Total Current Liab.
P220
P190
Accounts Rec.
440
180
Inventory
Total Current Ass. P1,070
410
P370
Long-term debt
Common stocks
1,960
PPE
5,600
1,810
Accum. Dep.
(2,100)
Retained earnings
430
Total Assets
P4,570
Total Liab and SHE
P4,570
REQUIRED: (Round answers to two decimal places)
1. Current Ratio
11. Earnings Per Share
12. P/E ratio
2. Acid-test Ratio
3. Accounts Receivable Turnover
13. Dividends Yield
4. Inventory Turnover
5. Gross Profit Margin
14. Payout Ratio
15. Debt Ratio
6. Operating Profit Margin
7. Return on Sales
8. BOA-Operational
9. BOA-Total Management performance
10. Return on Equity
16. Debt-Equity ratio
17. Times interest earned
18. Defensive Interval ratio
19. Cash flow to total debt
20. Cash flow margin
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