Simon Company's year-end balance sheets follow. At December 31 Current Year 1 Year Ago 2 Years Ago Assets Cash $ 26,016 $ 30, 721 $ 31,373 Accounts receivable, net 75,402 54,304 42,249 Merchandise inventory 93,837 70, 324 45,000 Prepaid expenses 8, 635 8, 309 3.556 Plant assets, net 246, 058 224, 228 194,722 Total assets $ 449,948 $387,886 $ 316,900 Liabilities and Equity Accounts payable $ 113, 157 $ 65,553 $ 40,994 Long-term notes payable 82, 053 90, 106 68,634 Common stock, $10 par value 162, 500 162,500 162,500 Retained earnings 92,238 69,727 44,772 Total liabilities and equity $ 449,948 $ 387,886 $ 316,900 For both the current year and one year ago, compute the following ratios: (1 - a) Compute the current ratio for each of the three years. (1 - b) Did the current ratio improve or worsen over the three-year period? (2 - a) Compute the acid - test ratio for each of the three years. (2-b) Did the acid - test ratio improve or worsen over the three-year period?

Simon Company's year-end balance sheets follow. At December 31 Current Year 1 Year Ago 2 Years Ago Assets Cash $ 26,016 $ 30, 721 $ 31,373 Accounts receivable, net 75,402 54,304 42,249 Merchandise inventory 93,837 70, 324 45,000 Prepaid expenses 8, 635 8, 309 3.556 Plant assets, net 246, 058 224, 228 194,722 Total assets $ 449,948 $387,886 $ 316,900 Liabilities and Equity Accounts payable $ 113, 157 $ 65,553 $ 40,994 Long-term notes payable 82, 053 90, 106 68,634 Common stock, $10 par value 162, 500 162,500 162,500 Retained earnings 92,238 69,727 44,772 Total liabilities and equity $ 449,948 $ 387,886 $ 316,900 For both the current year and one year ago, compute the following ratios: (1 - a) Compute the current ratio for each of the three years. (1 - b) Did the current ratio improve or worsen over the three-year period? (2 - a) Compute the acid - test ratio for each of the three years. (2-b) Did the acid - test ratio improve or worsen over the three-year period?

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 50E: Juroe Company provided the following income statement for last year: Juroes balance sheet as of...

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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.
Simon Company's year-end balance sheets follow, At December 31 Current Yr 1 Yr Ago 2 Yrs Ago Assets Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net $ 30,847 85,864 112,410 9,639 278,899 $4 36,772 $ 37,181 60,602 82,558 9,090 257, 236 49,574 52,807 4,131 224,507 Total assets $ 517,659 $ 446,258 S 368, 200 Liabilities and Equity Accounts payable Long-term notes payable secured by mortgages on plant assets Common stock, $10 par value Retained earnings $ 131,475 73,909 $ 48,116 95,373 163, 500 127,311 83,813 163, 500 72,771 $ 446,258 $ 368,200 101,613 163, 500 107,236 Total liabilities and equity $ 517,659 1. Express the balance sheets in common-size percents. (Do not round intermediate calculations and answers to 1 decimal place.) 2. Assuming annual sales have not changed in the last three years, is the change in accounts receivab assets favorable or unfavorable?
Simon Company's year-end balance sheets follow. At December 31 Current Yr 1 Yr Ago 2 Yrs Ago Assets $ 25,494 29,800 $ 52,676 69,608 7,901 216,273 Cash $ Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net 73,888 91,962 8,459 236,656 30,737 40,577 42,778 3,348 189,960 Total assets $ 436,459 $ 376, 258 $ 307,400 Liabilities and Equity $ 106,505 64, 223 $ 40,577 Accounts payable Long-term notes payable secured by mortgages on plant assets Common stock, $10 par value Retained earnings $ 83,695 68,615 162,500 35,708 $ 376, 258 $ 307,400 89,136 162,500 162,500 83,759 60,399 Total liabilities and equity $ 436,459 (1-a) Compute the current ratio for each of the three years. (1-b) Did the current ratio improve or worsen over the three year period? (2-a) Compute the acid-test ratio for each of the three years. (2-b) Did the acid-test ratio improve or worsen over the three year period?
Simon Company's year-end balance sheets follow. At December 31 Current Yr 1 Yr Ago 2 Yrs Ago Assets Cash $ 36,935 $ 41,463 $ 42,370 Accounts receivable, net 109,168 77,049 58,205 Merchandise inventory 133,260 98,850 60,159 Prepaid expenses 11,894 11,445 4,660 Plant assets, net 328,558 305,516 266,906 Total assets $ 619,815 $ 534,323 $ 432,300 Liabilities and Equity Accounts payable $ 158,964 $ 90,301 $ 56,493 Long-term notes payable secured bymortgages on plant assets 114,195 120,436 96,494 Common stock, $10 par value 163,500 163,500 163,500 Retained earnings 183,156 160,086 115,813 Total liabilities and equity $ 619,815 $ 534,323 $ 432,300 1. Express the balance sheets in common-size percents. (Do not round intermediate calculations and round your final percentage answers to 1…
Simon Company’s year-end balance sheets follow. At December 31 Current Yr 1 Yr Ago 2 Yrs Ago Assets Cash $ 30,328 $ 35,451 $ 36,196 Accounts receivable, net 89,000 62,300 51,200 Merchandise inventory 113,500 83,500 56,000 Prepaid expenses 9,767 9,306 4,022 Plant assets, net 266,348 248,187 214,582 Total assets $ 508,943 $ 438,744 $ 362,000 Liabilities and Equity Accounts payable $ 127,994 $ 74,889 $ 48,262 Long-term notes payable secured bymortgages on plant assets 96,638 101,920 80,802 Common stock, $10 par value 162,500 162,500 162,500 Retained earnings 121,811 99,435 70,436 Total liabilities and equity $ 508,943 $ 438,744 $ 362,000 The company’s income statements for the Current Year and 1 Year Ago, follow. Assume that all sales are on credit: For…
Simon Company’s year-end balance sheets follow. At December 31 Current Yr 1 Yr Ago 2 Yrs Ago Assets Cash $ 30,328 $ 35,451 $ 36,196 Accounts receivable, net 89,000 62,300 51,200 Merchandise inventory 113,500 83,500 56,000 Prepaid expenses 9,767 9,306 4,022 Plant assets, net 266,348 248,187 214,582 Total assets $ 508,943 $ 438,744 $ 362,000 Liabilities and Equity Accounts payable $ 127,994 $ 74,889 $ 48,262 Long-term notes payable secured bymortgages on plant assets 96,638 101,920 80,802 Common stock, $10 par value 162,500 162,500 162,500 Retained earnings 121,811 99,435 70,436 Total liabilities and equity $ 508,943 $ 438,744 $ 362,000 The company’s income statements for the Current Year and 1 Year Ago, follow. Assume that all sales are on credit: For…
Simon Company’s year-end balance sheets follow. At December 31 Current Yr 1 Yr Ago 2 Yrs Ago Assets Cash $ 34,026 $ 39,379 $ 39,798 Accounts receivable, net 98,617 68,224 53,063 Merchandise inventory 120,309 91,975 57,666 Prepaid expenses 10,957 10,544 4,602 Plant assets, net 307,089 282,118 255,071 Total assets $ 570,998 $ 492,240 $ 410,200 Liabilities and Equity Accounts payable $ 142,179 $ 81,525 $ 53,063 Long-term notes payable secured bymortgages on plant assets 104,127 112,083 88,841 Common stock, $10 par value 162,500 162,500 162,500 Retained earnings 162,192 136,132 105,796 Total liabilities and equity $ 570,998 $ 492,240 $ 410,200 The company’s income statements for the Current Year and 1 Year Ago, follow. For Year Ended December 31 Current Yr…
Simon Company’s year-end balance sheets follow. At December 31 Current Yr 1 Yr Ago 2 Yrs Ago Assets Cash $ 31,800 $ 35,625 $ 37,800 Accounts receivable, net 89,500 62,500 50,200 Merchandise inventory 112,500 82,500 54,000 Prepaid expenses 10,700 9,375 5,000 Plant assets, net 278,500 255,000 230,500 Total assets $ 523,000 $ 445,000 $ 377,500 Liabilities and Equity Accounts payable $ 129,900 $ 75,250 $ 51,250 Long-term notes payable 98,500 101,500 83,500 Common stock, $10 par value 163,500 163,500 163,500 Retained earnings 131,100 104,750 79,250 Total liabilities and equity $ 523,000 $ 445,000 $ 377,500 The company’s income statements for the current year and one year ago follow. Assume that all sales are on credit: For Year Ended December 31 Current Yr…
Simon Company’s year-end balance sheets follow. At December 31 Current Yr 1 Yr Ago 2 Yrs Ago Assets Cash $ 31,800 $ 35,625 $ 37,800 Accounts receivable, net 89,500 62,500 50,200 Merchandise inventory 112,500 82,500 54,000 Prepaid expenses 10,700 9,375 5,000 Plant assets, net 278,500 255,000 230,500 Total assets $ 523,000 $ 445,000 $ 377,500 Liabilities and Equity Accounts payable $ 129,900 $ 75,250 $ 51,250 Long-term notes payable secured bymortgages on plant assets 98,500 101,500 83,500 Common stock, $10 par value 163,500 163,500 163,500 Retained earnings 131,100 104,750 79,250 Total liabilities and equity $ 523,000 $ 445,000 $ 377,500 1. Express the balance sheets in common-size percents.2. Assuming annual sales have not changed in the last three years,…
Simon Company’s year-end balance sheets follow. At December 31 Current Yr 1 Yr Ago 2 Yrs Ago Assets Cash $ 31,800 $ 35,625 $ 37,800 Accounts receivable, net 89,500 62,500 50,200 Merchandise inventory 112,500 82,500 54,000 Prepaid expenses 10,700 9,375 5,000 Plant assets, net 278,500 255,000 230,500 Total assets $ 523,000 $ 445,000 $ 377,500 Liabilities and Equity Accounts payable $ 129,900 $ 75,250 $ 51,250 Long-term notes payable secured bymortgages on plant assets 98,500 101,500 83,500 Common stock, $10 par value 163,500 163,500 163,500 Retained earnings 131,100 104,750 79,250 Total liabilities and equity $ 523,000 $ 445,000 $ 377,500 (1-a) Compute the current ratio for each of the three years.(1-b) Did the current ratio improve or worsen over the three…
Simon Company's year-end balance sheets follow. At December 31 Current Yr 1 Yr Ago 2 Yrs Ago Assets Cash $ 36,740 $ 42,946 $ 44,736 Accounts receivable, net 108,593 74,412 60,238 Merchandise inventory 136,536 96,363 63,531 Prepaid expenses 11,949 11,385 5,020 Plant assets, net 322,735 306,405 273,875 Total assets $ 616,553 $ 531,511 $ 447,400 Liabilities and Equity Accounts payable $ 153,522 $ 89,825 $ 59,647 Long-term notes payable secured bymortgages on plant assets 113,594 125,915 100,853 Common stock, $10 par value 163,500 163,500 163,500 Retained earnings 185,937 152,271 123,400 Total liabilities and equity $ 616,553 $ 531,511 $ 447,400 1. Express the balance sheets in common-size percents. (Do not round intermediate calculations and round your final percentage answers to 1…
Simon Company's year-end balance sheets follow. At December 31 Current Year 1 Year Ago 2 Years Ago Assets Cash $ 32,700 $ 37,849 $ 37,130 Accounts receivable, net 94,775 65,580 51,527 Merchandise inventory 120,330 86,659 53,800 Prepaid expenses 10,118 10,034 4,252 Plant assets, net 285,450 268,303 235,991 Total assets $ 543,373 $ 468,425 $ 382,700 Liabilities and Equity Accounts payable $ 138,006 $ 78,372 $ 51,022 Long-term notes payable 100,111 107,738 83,731 Common stock, $10 par value 163,500 163,500 162,500 Retained earnings 141,756 118,815 85,447 Total liabilities and equity $ 543,373 $ 468,425 $ 382,700 For both the current year and one year ago, compute the following ratios: The company’s income statements for the current year and 1 year ago, follow. For Year Ended December 31 Current Year 1 Year Ago Sales…