StrikethroughCalculatorScratch PadA shareholder has received the following summarised financial results for Scruff Co for the last year:SmOrdinary shareholders funds25Non-current liabilities6Operating profitFinance charges2Taxation1The industry in which Scruff Co operates has the following average financial performance:Return on equity14%25%Return on capital employedWhich TWO of the following statements are true?Scruff Co's return on capital employed is lower than the industry averageScruff Co's return on equity is higher than the industry averageScruff Co's return on capital employed is higher than the industry averageScruff Co's return on equity is lower than the industry average7

Return on Capital Employed implies how much return has been earned by the firm on its total capital.…

Answered: Scratch Pad A shareholder has received…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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General: As part of the C-Suite team you are being asked to report to the CEO directly in regard to financial matters. Crunch the following numbers and report back to the CEO: X Company accounts for its 40% investment in Y Company using the equity method of accounting. The investment cost $760,000 on 1/1/X1. During X1, Y reported net income of $400,000 and paid total dividends of $80,000 during X1. On December 31, 20X1, X sold its investment for $800,000. What amount of gain or loss is on X income statement? A. $120,000 loss B. $ 88,000 loss C. $ 72,000 gain $ 88,000 gain D. E. $120,000 gain ONE CORRECT ANSWER
Income Statement and Earnings per Share for Discontinued Operations Apex Inc. reports the following for a recent year: Income from continuing operations before income tax expense $1,000,000 Loss from discontinued operations $240,000* Weighted average number of shares outstanding 20,000 Applicable tax rate 40% *Net of any tax effect. Question Content Area a. Prepare a partial income statement for Apex Inc., beginning with income from continuing operations before income tax expense.
A firm had the following financials last year: Sales Revenue = $3,060Accounts receivable = $500Interest expense = $126Total operating expenses = $600Accounts payable = $240Cost of goods sold = $1,800Dividend on preferred stock = $18Tax rate = 40% Number of outstanding number of common shares = 1,000 The E.P.S of the firm, rounded to four decimal places is
The most recent financial statements for Alexander Company are shown here: Income Statement Balance Sheet Sales $ 55,000 Current assets $ 86,130 Long-term debt $ 59,400 Costs 35,200 Fixed assets 47,520 Equity 74,250 Taxable income $ 19,800 Total $ 133,650 Total $ 133,650 Taxes (22%) 4,356 Net income $ 15,444 Assets and costs are proportional to sales. The company maintains a constant 36 percent dividend payout ratio and a constant debt-equity ratio. What is the maximum increase in sales that can be sustained assuming no new equity is issued?
the income statement for Stretch-Tape Corporation reports net sales of $439,900 and net income of $54,780. Average total assets for the year are $830,000. Stockholders’ equity at the beginning of the year was $530,000, and $23,000 was paid to stockholders as dividends during the year. There were no other stockholders’ equity transactions that occurred during the year.Required:Calculate the return on assets, profit margin, asset turnover, and return on equity ratios. (Round your answers to 1 decimal place.) Profitability Ratios Return on assets 6.6 % Profit margin 12.5 % Asset turnover times Return on equity %
A company has reported noncontrolling interests in the latest financial reports, as follows: Net income attributable to NCI Noncontrolling interest in shareholders' equity 772.0 11,556.0 Dividends paid on noncontrolling interests in the CFS 193.0 If net income attributable to NCI grows by 8.0% and the NCI dividend pay-out ratio is 16.0% then what will be reported, in the next balance sheet, for NCI? Select one: 12,196.8 12,123.0 12,256.4 12,135.0
Extracts from the financial statements of Persimmon are as follows: Statement of profit or loss Statement of financial position $'000 $'000 Operating profit 230 Ordinary shares 2,000 Finance costs (15) Revaluation surplus 300 Profit before tax 215 Retained earnings 1,200 Income tax (15) 3,500 Profit for the year 200 10% loan notes 1,000 Current liabilities 100 Total equity and liabilities 4,600 What is the return on capital employed?\
Six Measures of Solvency or Profitability The following data were taken from the financial statements of Gates Inc. for the current fiscal year. Property, plant, and equipment (net) $1,320,500 Liabilities: Current liabilities $139,000 Note payable, 6%, due in 15 years 695,000 Total liabilities $834,000 Stockholders' equity: Preferred $4 stock, $100 par (no change during year) $500,400 Common stock, $10 par (no change during year) 500,400 Retained earnings: Balance, beginning of year $534,000 Net income 211,000 $745,000 Preferred dividends $20,016 Common dividends 57,784 77,800 Balance, end of year 667,200 Total stockholders' equity $1,668,000 Sales $10,977,750 Interest expense $41,700 Assuming that total assets were $2,377,000 at the beginning of the current fiscal year, determine the…
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Use the information below to build a properly formatted income statement. A: The firm has 25,280,000 shares outstanding and its earnings per share is $2.40. Calculate Net Income. B: The firm's corporate tax rate is 40%. Calculate the firm's EBT. C: After completing A and B above, what is the firm's corporate tax expense? D: The firm's operating income is 1.80 times its Net Income. Determine the firm's EBIT. E: Given your answer to D, calculate the firm's Interest Expense. F: After completing the above: Gross Profit is 18.00 times its Interest Expense. Calculate Gross Profit. G: Finally, the firm's Revenue is 1.50 times its EBIT. Calculate the firm's Revenue. INSTRUCTIONS: Write ratios involving dollar amounts out to the penny, with no dollar sign: 1000.00. All ratios and interest rates should be calculated as follows: 11.28 (no percent sign) For this problem: Net Income = Earnings before Taxes = Тах еxpens 3 Earnings before Taxes & Interest = Interest expense = Gross profit = Revenue =
Six Measures of Solvency or Profitability The following data were taken from the financial statements of Loveseth Inc. for the current fiscal year. Property, plant, and equipment (net) $982,500 Liabilities: Current liabilities $131,000 Note payable, 6%, due in 15 years 655,000 Total liabilities $786,000 Stockholders' equity: Preferred $2 stock, $100 par (no change during year) $471,600 Common stock, $10 par (no change during year) 471,600 Retained earnings: Balance, beginning of year $504,000 Net income 254,000 $758,000 Preferred dividends $9,432 Common dividends 119,768 129,200 Balance, end of year 628,800 Total stockholders' equity $1,572,000 Sales $11,035,200 Interest expense $39,300 Assuming that total assets were $2,240,000 at the beginning of the current fiscal year, determine the…

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