Get correct answer accounting questions Selected financial data from the December 31 year-end statementsof Morrison Company:Total assets: $4,800,000 Long-term debt (10% interest rate):$600,000 Total stockholders' equity: $2,000,000 Interest paid onlong-term debt: $60,000 Net income: $320,000Total assets at the beginning of the year were $4,600,000; totalstockholders' equity was $1,800,000. The company's tax rate is30%.Required:1. Compute the return on total assets2. Compute the return on equity3. Is financial leverage positive or negative?

Step 1: Definitions of1.Return on Total Assets (ROA):ROA measures how efficiently a company uses its…

Answered: Selected financial data from the…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter16: Financial Statement Analysis

Section: Chapter Questions

Problem 21E

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Income Statement Ratio The income statement of Holly Enterprises shows operating revenues of $134,800, selling expenses of $38,310, general and administrative expenses of $36,990, interest expense of $580, and income tax expense of $13,920. Hollys stockholders equity was $280,000 at the beginning of the year and $320,000 at the end of the year. The company has 20,000 shares of stock outstanding at the end of the year. Required Compute Hollys profit margin. What other information would you need in order to comment on whether this ratio is favorable?
Ernst Companys balance sheet shows total liabilities of 32,500,000, total stockholders equity of 8,125,000, and total assets of 40,625,000. Required: Note: Round answers to two decimal places. 1. Calculate the debt ratio. 2. Calculate the debt-to-equity ratio.
Juroe Company provided the following income statement for last year: Juroes balance sheet as of December 31 last year showed total liabilities of 10,250,000, total equity of 6,150,000, and total assets of 16,400,000. Required: Note: Round answers to two decimal places. 1. Calculate the times-interest-earned ratio. 2. Calculate the debt ratio. 3. Calculate the debt-to-equity ratio.
The following data were taken from the financial statements of Gates Inc. for the current fiscal year. Property, plant, and equipment (net) $1,212,000 Liabilities: Current liabilities $120,000 Note payable, 6%, due in 15 years 606,000 Total liabilities $726,000 Stockholders' equity: Preferred $4 stock, $100 par (no change during year) $544,500 Common stock, $10 par (no change during year) 544,500 Retained earnings: Balance, beginning of year $580,000 Net income 226,000 $806,000 Preferred dividends $21,780 Common dividends 58,220 80,000 Balance, end of year 726,000 Total stockholders' equity $1,815,000 Sales $16,351,500 Interest expense $36,360 Assuming that total assets were $2,414,000 at the beginning of the current fiscal year, determine the following. When required, round to one decimal…
Find for Armstrong Company and Blair Company : Liquidity Ratio (a) Current Ratio Market tests (b) Price/earnings ratio (c) Divident yield ratio (%)
The following data were taken from the financial statements of Loveseth Inc. for the current fiscal year. Property, plant, and equipment (net) $1,448,000 Liabilities: Current liabilities $146,000 Note payable, 6%, due in 15 years 724,000 Total liabilities $870,000 Stockholders' equity: Preferred $4 stock, $100 par (no change during year) $870,000 Common stock, $10 par (no change during year) 870,000 Retained earnings: Balance, beginning of year $928,000 Net income 350,000 $1,278,000 Preferred dividends $34,800 Common dividends 83,200 118,000 Balance, end of year 1,160,000 Total stockholders' equity $2,900,000 Sales $15,437,100 Interest expense $43,440 Assuming that total assets were $3,581,000 at the beginning of the current fiscal year, determine the following: When required, round to one…
Financial Ratios for Assessing Profitability and Managing Debt Selected financial data from the June 30 year-end statements of Safford Company are given below: Total assets at the beginning of the year were $3,000,000; total stockholders’ equity was $2,200,000. The company’s tax rate is 30%. Required: 1. Compute the return on total assets. 2. Compute the return on equity. 3. Is financial leverage positive or negative? Explain.
Compute for the Current Assets
Assuming that total assets were $8,037,000 at the beginning of the current fiscal year, determine the following: When required, round to one decimal place. a. Ratio of fixed assets to long-term liabilities b. Ratio of liabilities to stockholders' equity c. Asset turnover d. Return on total assets e. Return on stockholders' equity f. Return on common stockholders' equity % % %
For the year ended December 31, Southern Supply had net sales of $7,320,000, costs and other expenses (including income tax) of $6,010,000, and a gain from discontinued operations (net of income tax) of $420,000. a. Prepare a condensed income statement (including earnings per share), assuming that 910,000 shares of common stock were outstanding throughout the year. b. Which earnings per share figure would you recommend be used to compute the price-earnings ratio for Southern Supply?
The income statement for Dodson Corporation reported net income of $22,400 for the year ended December 31 before considering the following: During the year the company purchased available-for-sale securities. At year end, the fair value of the investment portfolio was $2,100 more than cost. The balance of Retained Earnings was $83,000 on January 1. . Dodson Corporation paid $9,000 in cash dividends during the year. Calculate the balance of Retained Earnings on December 31. 51,600
Shareholders' Equity Tinman Corporation reports the following balances at the end of the current year: Common Stock, $5 par, $50,000; Retained earnings, $110,000; Additional Paid-in Capital on Common Stock, $200,000; Income Taxes Payable, $9,800; and Accumulated Other Comprehensive Income, $26,000. Prepare the shareholders' equity section of Tinman's year-end balance sheet. Tinman Corporation Partial Balance Sheet December 31 Shareholders' Equity Contributed Capital: Total contributed capital Total Shareholders' Equity

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