Required: Analyze Delima's financial statement. Include the following ratios for 2020 and discuss your findings (2019 values are provided for comparison): 1) Current ratio 2) Inventory turnover (year 2019 - 7.2 times) 3) Debt to assets ratio (year 2019 - 82%) (year 2019 - 0.92:1)

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Refer to the following financial statements of Delima Corporation for 2019 and
2020:
Delima Corporation
Income Statements
For the year ended 31 December (in millions)
2020
2019
$13,198
$ 7,750
$ 5,448
$3,472
$ 1,976
233
$ 12,397
$ 7,108
$ 5,289
$ 3,299
$ 1,990
$
$4
$ 1,742
Net sales
Cost of goods sold
Gross profit
Selling and administrative expenses
Income from operations
Interest expense
Other (income) expense, net
$
248
11
Income before income taxes
$ 1,732
Income tax expense
503
502
Net income
$ 1,229
$ 1,240
Delima Corporation
Balance sheet
For the year ended 31 December (in millions)
Assets
2020
2019
Current assets
Cash
444
$
$ 1,188
$ 1,132
460
$ 1,190
$ 1,056
Accounts receivables (net)
Inventories
Other current assets
247
225
$ 3,027
$ 3,281
$ 5,593
$ 2,915
$ 3,128
$ 5,804
$ 11,847
Total current assets
Property (net)
Other assets
Total assets
$11,901
Liabilities and Stockholders' Equity
$ 3,313
$ 6,826
$ 1,762
$11,901
$ 3,184
$ 6,509
$ 2,154
$ 11,847
Current liabilities
Long-term liabilities
Stockholders' equity - common shares
Total liabilities and stockholders' equity
Transcribed Image Text:Refer to the following financial statements of Delima Corporation for 2019 and 2020: Delima Corporation Income Statements For the year ended 31 December (in millions) 2020 2019 $13,198 $ 7,750 $ 5,448 $3,472 $ 1,976 233 $ 12,397 $ 7,108 $ 5,289 $ 3,299 $ 1,990 $ $4 $ 1,742 Net sales Cost of goods sold Gross profit Selling and administrative expenses Income from operations Interest expense Other (income) expense, net $ 248 11 Income before income taxes $ 1,732 Income tax expense 503 502 Net income $ 1,229 $ 1,240 Delima Corporation Balance sheet For the year ended 31 December (in millions) Assets 2020 2019 Current assets Cash 444 $ $ 1,188 $ 1,132 460 $ 1,190 $ 1,056 Accounts receivables (net) Inventories Other current assets 247 225 $ 3,027 $ 3,281 $ 5,593 $ 2,915 $ 3,128 $ 5,804 $ 11,847 Total current assets Property (net) Other assets Total assets $11,901 Liabilities and Stockholders' Equity $ 3,313 $ 6,826 $ 1,762 $11,901 $ 3,184 $ 6,509 $ 2,154 $ 11,847 Current liabilities Long-term liabilities Stockholders' equity - common shares Total liabilities and stockholders' equity
Required:
Analyze Delima's financial statement. Include the following ratios for 2020 and
discuss your findings (2019 values are provided for comparison):
1) Current ratio
2) Inventory turnover (year 2019 - 7.2 times)
3) Debt to assets ratio (year 2019 - 82%)
4) Return on assets. (year 2019 - 10.8%)
5) Profit margin (yea. (2019 - 10.0%)
(year 2019 - 0.92:1)
Transcribed Image Text:Required: Analyze Delima's financial statement. Include the following ratios for 2020 and discuss your findings (2019 values are provided for comparison): 1) Current ratio 2) Inventory turnover (year 2019 - 7.2 times) 3) Debt to assets ratio (year 2019 - 82%) 4) Return on assets. (year 2019 - 10.8%) 5) Profit margin (yea. (2019 - 10.0%) (year 2019 - 0.92:1)
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