Show your work (use of formula, etc.) in solving the problems. Provide your answers/solutions in the answer space provided below. Answer all questions. 1. Data for Cary Company and its industry average follow. Balance Sheet as of Dec. 31 (Millions of Dollars) Assets Liabilities and Owner's Equity 2020 2020 Current Liabilities 75,500 Accts payable Current Assets Cash 127,000 A/R 330,000 Notes payable 84,000 Inventories 255,500 Other current liabilities 115,000 Total CA 661,000 Total CL 326,000 Long-term debt 282,500 Total Liabilities Common Equity 943,500 |Total Liabilities and Equity Net fixed assets 260,500 586,500 Net plant and equipment 357,000 Total Assets 943,500 Income statement for the year ending December 31 2020 Sales 1,800,500 COGS (1,458,000) Gross profit Fixed operating expenses except depreciation 342,500 (210,000) Earnings before interest, taxes, depre and amort (EBITDA) 132,500 Depreciation (40,000) EBIT (Opering income) 92,500 Interest expense (44,000) EBT (Taxable income) 48,500 Taxes (40%) (19,400) Net income 29,100
Show your work (use of formula, etc.) in solving the problems. Provide your answers/solutions in the answer space provided below. Answer all questions. 1. Data for Cary Company and its industry average follow. Balance Sheet as of Dec. 31 (Millions of Dollars) Assets Liabilities and Owner's Equity 2020 2020 Current Liabilities 75,500 Accts payable Current Assets Cash 127,000 A/R 330,000 Notes payable 84,000 Inventories 255,500 Other current liabilities 115,000 Total CA 661,000 Total CL 326,000 Long-term debt 282,500 Total Liabilities Common Equity 943,500 |Total Liabilities and Equity Net fixed assets 260,500 586,500 Net plant and equipment 357,000 Total Assets 943,500 Income statement for the year ending December 31 2020 Sales 1,800,500 COGS (1,458,000) Gross profit Fixed operating expenses except depreciation 342,500 (210,000) Earnings before interest, taxes, depre and amort (EBITDA) 132,500 Depreciation (40,000) EBIT (Opering income) 92,500 Interest expense (44,000) EBT (Taxable income) 48,500 Taxes (40%) (19,400) Net income 29,100
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Please Solve
Transcribed Image Text:Show your work (use of formula, etc.) in solving the problems.
Provide your answers/solutions in the answer space provided below.
Answer all questions.
1. Data for Cary Company and its industry average follow.
Balance Sheet as of Dec. 31 (Millions of Dollars)
Assets
Liabilities and Owner's Equity
2020
2020
Current Assets
Current Liabilities
Accts payable
Notes payable
Cash
75,500
127,000
A/R
330,000
84,000
Inventories
255,500
Other current liabilities
115,000
Total CA
661,000 Total CL
326,000
Long-term debt
282,500 Total Liabilities
Common Equity
943,500 Total Liabilities and Equity
Net fixed assets
260,500
Net plant and equipment
586,500
357,000
Total Assets
943,500
Income statement for the year ending December 31
2020
Sales
1,800,500
COGS
(1,458,000)
Gross profit
342,500
(210,000)
Fixed operating expenses except depreciation
Earnings before interest, taxes, depre and amort (EBITDA)
Depreciation
EBIT (Opering income)
132,500
(40,000)
92,500
Interest expense
(44,000)
EBT (Taxable income)
48,500
Taxes (40%)
(19,400)
Net income
29,100
Transcribed Image Text:a. Calculate the indicated ratios for Cary.
Industry
Ratio
Cary
Average
Current ratio
2.0 X
Days sales outstanding
35 days
Inventory turnover
5.6 X
Total assets turnover
3.0 X
Net profit margin
1.2%
Return on assets (ROA)
3.60%
Return on equity (ROE)
9.00%
Debt ratio
60%
b. Construct the DuPont ROA equations for both Cary and the industry.
DuPont ROA (Cary) =
DuPont ROA (Industry) =
c. Outline Cary's strengths and weaknesses as revealed by your analysis.
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