REQUIREMENTS:A. Compute for the following ratios:IndustryRatiosCompany ACompany BCompany CStandardsCurrent Ratio1.95Receivable Turnover5.95Inventory Turnover4.50Debt Ratio40%Debt to Equity RatioNet Profit Margin45%8.5%Return on Assets (ROA)22.5%Return on Equity (ROE)32.2% An investor was looking at the financial information of the three companies that he would like to invest below:BALANCE SHEETCompany AP 1,250,000Company BP 2,000,000Company CP 5,500,000CashAccounts Receivable8,000,0004,000,0003,000,000Inventories12,000,00020,000,00012,600,000Current Assets21,250,00026,000,00021,100,000Fixed and Other Assets8,750,0006,000,0002,900,000TOTAL ASSETS30,000,00032,000,00024,000,000Current Liabilities10,000,0005,000,0004,000,000Long-term DebtStockholder's Equity8,000,00017,000,00011,000,00012,000,00010,000,0009,000,000TOTAL LIABILITIES AND EQUITY30,000,00032,000,00024,000,000INCOME STATEMENTSales50,000,00080,000,00060,000,000Cost of Sales25,000,00052,000,00027,000,00015,000,000Operating ExpensesOperating Profit10,000,00018,000,00010,000,00018,000,00015,000,000Interest2,500,0006,000,0004,500,000Taxes (30%)2,250,0003,600,0003,150,000Net Profit5,250,0008,400,0007,350,000

“Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…

Answered: REQUIREMENTS: A. Compute for the…

REQUIREMENTS: A. Compute for the following ratios: Industry Ratios Company A Company B Company C Standards Current Ratio Receivable Turnover Inventory Turnover 1.95 5.95 4.50

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

See similar textbooks

Related questions

Q: What is the Analysis for year 2018 - 2020?

A: An analysis is made in order to determine the process of the company. The analysis depends upon…

Q: Find the liquidity ratios (current ratios, acid-test ratio, average collection period, accounts…

A: Ratio analysis is referred to as an quantitative method for gaining an insight into the liquidity,…

Q: -Current Ratio 2-Quick Ratio 3-Cash Ratio 4-Receivables Turnover 5-Inventory Turnover…

A: “Since you have posted multiple questions with multiple sub parts, we will provide the solution only…

Q: Question 2 Selected ratios of Company X are shown below: Inventory turnover Days' sales uncollected…

A: Ans. In general the performance of Company X is not good in 2021 when compared to its performance in…

Q: a. Receivables tumover ratio b. Inventory turnover ratio c. Current ratio times times

A: Ratio analysis used identify the business performance of the company. It is used to measure…

Q: i. Debt-to-equity ratio 2021 : 0.74 2020 : 1.12 ii. Net profit margin 2021 : 34.58% 2020 : 36.25%…

A: Ratio analysis is very important technique of management accounting. Under this, various type of…

Q: d) Payables payment period in days e) Number of days inventory on hand 2. Analyse and interpret…

A: Ratio Analysis The purpose pre preparing the Ratio analysis which indicating the strength and…

Q: Using the fiscal year end 2020 annual report for General Mills, Inc. and the figures from the 2020…

A: Ratio Analysis - The ratio is the technique used by the prospective investor or an individual or…

Q: Which of the following levels of profitability in a multiple-step income statement represents…

A: Gross margin (gross profit): Gross margin is the amount of revenue earned from goods sold over the…

Q: Use the financial ratios of company A and company B to answer the questions below.…

A: Note: Since there are multiple questions posted, we will answer first three questions. If you want…

Q: Using these data from the comparative balance sheets of Concord Company, perform a vertical…

A: The balance sheet is one of the important financial statements of the business. The vertical…

Q: Question 1 The following information represent Mooncake Corporation RM 3,549,000 179,000 911,000…

A: Assumption :— All Sales are on Credit. Current Assets includes Marketable securities.

Q: 5.2 Explain how the company can improve on the fallowing by providing twa suggestions each: 5.2.1…

A: Inventory turnover period means in how many days inventory is sold or used in the particular year.…

Q: How do you calculate net sales? Also... Do you only look at current year data or do you factor…

A: Net Sales=Gross Sales-Returns-Allowances-Discounts where, Gross sales=the total unadjusted sales of…

Q: GIVE AN INTERPRETATION OF THESE RATIOS CONCLUSIVELY Acid test ratio = (total current asset –…

A: After calculating the required ratios it is very important to interpret the results of it.

Q: interpret or compare its results from 2018 to 2019

A: Current ratio means the ability of the company to repay the current liabilities of the company with…

Q: Based on the information given in picture #1, complete the following ratios for the last TWO years…

A: Ratio - It is the comparison between two or more financial parameter to each other for analyzing the…

Q: QUESTION 5 REQUIRED 5.1 Use the information provided below to calculate the following ratios for…

A: As posted to answer 5.1.4 , 5.1.5 , 5.1.6 so we are answering only those parts.

Q: Provide an analysis of other common ratios including gross margin, operating margin, current ratio,…

A: Since, the data is given for one year only so relationship for itself cannot be performed. The…

Q: Some of the financial ratios of V, W, X, Y, and Z companies are calculated and presented in the…

A: Financial analysis is the analysis of a corporation on the basis of the financial items that are…

Q: Required Information. Problem 17-2A (Algo) Ratios, common-size statements, and trend percents LO P1,…

A: Detailed explanation:To determine trend percents, deduct amount of year being compared from the base…

Q: Assets Current assets. Long-term investments Plant assets, net Total assets Liabilities and Equity…

A: Trend percent is the percent relationship in which each item of different years bear to the same…

Q: 1. Current Ratio 5.3 7.08 2. Acid Test Ratio 5.1 6.8 3. Gross Profit Ratio 30% 40%

A: Solution:- Liquidity ratios:- It measures liquidity position of the company. The following are the…

Q: FINANCIAL POSITION AS AT 31ST DECEMBER 2020 RM('000) RM('000) Non- Curent Assets Property, plant and…

A: An accounting ratio is a comparison of two or more financial data that is used to analyze a…

Q: calculate these g) Inventory turnover times (h) Days in inventory days (i) Times…

A: g) For the year 2017

Q: Ratios Current Ratio Quick Ratio Receivable Turnover Inventory Turnover Debt Ratio Return on Assets…

A: Concept. Financial ratios of the company are used by lenders and investors for making decisions with…

Q: Problem 13-5A (Algo) Comparative ratio analysis LO P3 [The following information applies to the…

A: Step 1: Inventory Turnover can be calculated by dividing the Cost of Goods Sold by the Average…

Q: How is this ratio calculated? What does the ratio show? Using the data below (Sunn Corporation) ,…

A: The inventory turnover ratio expresses the relationship between the average cost of goods sold…

Q: Compare the Solvency, Liquidity and Profitability for the two companies

A: Solvency of any company is the ability of the company to run its day to day operation. The solvency…

Q: Please Calculate and interpret the following ratios Activity: Inventory Turnover , Receivables…

A: Ratio analysis refer to the evaluation of financial ration in order to get idea about profitability,…

Q: Match the following statements to the appropriate terms!

A: A financial ratio or accounting ratio is a relative magnitude of two selected numerical values taken…

Q: Problem 17-2A (Algo) Ratlos, common-size statements, and trend percents LO P1, P2, P3 [The following…

A: Current assets are assets in the form of cash or can be converted into cash within a year.Current…

Q: Suppose you have been provided with the following information which was extracted from records of…

A: Note: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question…

Q: Ratio Analysis - Explain how the following ratios are calculated and what the ratio indicates.…

A: NOTE: This question contains 9 parts. Nothing is stated regarding which parts need to be solved.…

Q: Which company stock is better to invest and why

A: Answer:- Stock meaning:- A stock is a broad term that generally refers to any company's ownership…

Q: Using these data from the comparative balance sheets of Bonita Company, perform a vertical analysis.…

A: Percentage = Asset/Total assets

Q: VII. Direction: Compute and interpret. The following comparative financial statements are provided…

A: The question is related to Ratio Analysis. Efficiency or performance or turnover ratio are…

Q: Return on capital employed Acid test ratio iv. V. vi. Current ratio vii. Times interest earned ratio…

A: The times of interest earned is the ratio which is usually used and computed in order to know that…

Q: Compute the receivable turnover ratio Also compute the inventory turnover ratio

A: A quantitative method that provides information about the company including its liquidity,…

Q: Question 2 The following sets of ratios are industry averages. Ratios Inventory turnover ratio Debt…

A: Lets understand the basics. Financial ratio analysis is useful to many stakeholders. It is useful…

Q: Compared to using the weighted average cost method to account for inventory, during aperiod in which…

A: First-in-First-Out (FIFO): In First-in-First-Out method, the costs of the initially purchased…

Q: Ratios Calculated Year 1 Year 2 5.20 Inventory turnover 10.40 Debt-to-equity 0.70 Price-to-cash-flow…

A: Financial ratios are based on the relationship between two financial line items. For instance the…

Q: Ratio Industry Ratios GnG Ratios 1. Current Ratio 5.3 7.08 2. Acid Test Ratio 5.1 6.8 3.…

A: Introduction:- Ratio analysis play vital role in comparison of company performance with industry…

Q: Selected current year-end financial statements of Cabot Corporation follow. (All sales were on…

A: Since you have posted a question with multiple sub-parts, we will do the first three sub-parts for…

Q: For each ratio listed, identify whether the change in ratio value from the Prior Year to the Current…

A: 1. Profit margin = 1% increase is favorable It indicates that company is making more profit per…

Q: Current ratio Quick ratio Total asset turnover Inventory turnover Receivables turnover Debt ratio…

A: The ratio is the mathematical relationship between two variables, which is often used to make…

Q: ertical analyses by calculating the percentages of a base amount. (Round answers to 0 dec Accounts…

A: Horizontal Analysis: It implies an analysis of company's financial statements by drawing a…

Question

100%

REQUIREMENTS:
A. Compute for the following ratios:
Industry
Ratios
Company A
Company B
Company C
Standards
Current Ratio
1.95
Receivable Turnover
5.95
Inventory Turnover
4.50
Debt Ratio
40%
Debt to Equity Ratio
Net Profit Margin
45%
8.5%
Return on Assets (ROA)
22.5%
Return on Equity (ROE)
32.2%

An investor was looking at the financial information of the three companies that he would like to invest below:
BALANCE SHEET
Company A
P 1,250,000
Company B
P 2,000,000
Company C
P 5,500,000
Cash
Accounts Receivable
8,000,000
4,000,000
3,000,000
Inventories
12,000,000
20,000,000
12,600,000
Current Assets
21,250,000
26,000,000
21,100,000
Fixed and Other Assets
8,750,000
6,000,000
2,900,000
TOTAL ASSETS
30,000,000
32,000,000
24,000,000
Current Liabilities
10,000,000
5,000,000
4,000,000
Long-term Debt
Stockholder's Equity
8,000,000
17,000,000
11,000,000
12,000,000
10,000,000
9,000,000
TOTAL LIABILITIES AND EQUITY
30,000,000
32,000,000
24,000,000
INCOME STATEMENT
Sales
50,000,000
80,000,000
60,000,000
Cost of Sales
25,000,000
52,000,000
27,000,000
15,000,000
Operating Expenses
Operating Profit
10,000,000
18,000,000
10,000,000
18,000,000
15,000,000
Interest
2,500,000
6,000,000
4,500,000
Taxes (30%)
2,250,000
3,600,000
3,150,000
Net Profit
5,250,000
8,400,000
7,350,000

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Introduction

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

Please Solve
Which of the ratios listed helps to indicate whether current liabilities could be paid without having to sell the inventory? a.Current ratio b.Profit margin c.Quick ratio d.Debt to equity
Problem 13-2A (Algo) Ratios, common-size statements, and trend percents LO P1, P2, P3 [The following information applies to the questions displayed below] Selected comparative financial statements of Korbin Company follow. KORBIN COMPANY Comparative Income Statements For Years Ended December 31 2021 2020 2019 Sales Cost of goods sold $ 402,346 $ 308,230 242,212 $ 213,900 194,493 136,896 Gross profit 160,134 113,737 77,004 Selling expenses 57,133 42,536 28,235 Administrative expenses 36,211 27,124 17,754 Total expenses 93,344 69,660 45,989 Income before taxes Income tax expense 66,790 44,077 31,015 12,423 9,036 6,296 Net income $ 54,367 $ 35,041 $ 24,719 KORBIN COMPANY Comparative Balance Sheets December 31 Assets Current assets Long-term investments Plant assets, net Total assets Current liabilities Liabilities and Equity Common stock Other paid-in capital Retained earnings Total liabilities and equity $ 180,932 2021 $ 63,959 116,973 0 2020 $ 42,808 800 106,691 $ 180,932 $ 150,299 $…
In a common-sized income statement, 100% is the a. net cost of goods sold b. gross profit c. sales d. net income
Please help me evaluate these financial ratios to identify any trends or issues and potential reasons for them. Could Covid have played a role? Please help me interpret the ratios in Group B from managements perspective from period 12/31/19 & 6/30/20
Calculate the following ratios and interpret the results: (Use the information attached with the paper). Debt to Capitalization ratio Acid test ratio Inventory turnover ratio (in days) Times interest earned ratio
Compare the performance of Fly X to the Industry. For each ratio, comment on whether Fly X is positive or negative relative to the Industry. Median Industry Fly X Ratios Current Ratio 1.43X 1.45 Quick Ratio 0.84X 0.88 Total Asset Turnover Ratio 0.85 1.30 Inventory Turnover Ratio 6.15 12.10 Average Inventory Ratio 59.35 30.17 Receivables Turnover 9.82 13.08 Average Collection Period 37.17 27.90 Debt Ratio 0.52 0.39
MANCOSA POSTGRADUATE DIPLOMA IN PRORCT MANAGEMENT QUESTION REQUIRED Use the information provided below to calculate the following ratios. Where applicable, und e answers to two decimal places 111 Gross profe margin 312 Operating profit margin 31.3 invertory turnover period 31.4 Trade recelvatles peried 31.5 Trade payables period 31 316 Current ratio 3.1.7 Acid test ratio 3.18 Return on capital employed 32 Comment on the control ef debtors by Saturn imited Sugpest TWO 2) ways in which Saturn Limited can improve its operating profit margin. 33 INFORMATION Excerpts of financial data of Satum Limited for 2019 are as follows: STATEMENT OF COMPREHINSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2019 2600 00 Cost of sales Gros proft Operating profit 1400 000 600 000 40 000 S60 00 Interest expense Proft before tas Tan N STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER: 2019 2008 ASSETS Non-current assets Inventories Accounts recelvable 780000 500 000 240 000 120 000 45L000 1250 p0 EQUITY AND…
Selected ratios of Company X are shown below: Inventory turnover Days' sales uncollected Days' purchases in accounts payable Total asset turnover Equity ratio Times interest earned 2021 5.3 32.4 21.0 2.6 0.8 N.A. 2020 7.1 18.3 20.0 2.5 0.8 N.A. Using the financial ratios provided, analyse the performance of Company X in 2021 compared to the previous year.
Need the answers in that formats thank you
Compare the performance of Fly X to the Industry. For each ratio, comment on whether Fly X is positive or negative relative to the Industry. Median Industry Fly X Ratios Current Ratio 1.43X 1.45 Quick Ratio 0.84X 0.88 Total Asset Turnover Ratio 0.85 1.30 Inventory Turnover Ratio 6.15 12.10 Average Inventory Ratio 59.35 30.17 Receivables Turnover 9.82 13.08 Average Collection Period 37.17 27.90 Debt Ratio 0.52 0.39
Receivable turnover Average collection period Inventory turnover Fixed asset turnover Total asset turnover Current ratio Quick ratio Assets Utilization Ratios c. Liquidity ratios. Note: Do not round intermediate calculations. Round your answers to 2 decimal places. Liquidity Ratios times times times days times times times

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS