Sprinkle Top Ltd. and Coffee Shop Inc. are both specialty food chains. The two companies reported these figures,in thousands:(Click the icon to view Sprinkle Top's financial statements.)(Click the icon to view Coffee Shop's financial statements.)Requirements1. Compute gross profit percentage and the rate of inventory turnover for Sprinkle Top and Coffee Shop for 2020.2. Based on these statistics, which company looks more profitable? Why? What other expense category should weconsider in evaluating these two companies?Requirement 1. Compute gross profit percentage and the rate of inventory turnover for Sprinkle Top and Coffee Shopfor 2020. (Round gross profit percentage to one decimal place, X.X%, and the inventory turnover rate to onedecimal place, X.X.)CompanySprinkle TopCoffee ShopGross profitpercentage%%Inventory turnover ratetimestimes

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Answered: Sprinkle Top Ltd. and Coffee Shop Inc.…

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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The following information is taken from the financial statements of Down Home Deli for the last three years. The owner, John Walton is quite pleased to see that his sales are growing steadily. 2018 2017 2016 Sales $ 61,500 $ 50,400 $ 42,000 Cost of goods sold 27,670 21,170 16,800 Operating income 7,530 6,050 4,620 Net income 3,075 4,030 2,940 Instructions: (a) Calculate gross profit margin, profit margin, and profit margin using operating income. (b) Comment on whether the Deli is, in fact, doing better over the three years as John believes.
Compare the two companies and declare which of the two company will be: a. Profitable b. Ideal for investment c. Good for short term investment d. Good for long term investment
calculate Alex‘s gross profit percentage and return on sales ratio. (Round answer to one decimal place)
ABC Inc. is a Corporation with a focus on Garment and textile manufacturing in the UAE. They are now looking to finance their new project, are looking for a bank to give them a loan. Calculate the following ratios for both 2018 and 2019, interpret and analyze them: Days Sales in Inventory Average Collection Period
The below information relates to Drake Ltd which manufactures and sells commercial kitchen equipment. The company is constantly profitable. Drake Ltd’s financial statement ratios are as follows: For each of the following transactions or events, indicate the directional effect (increase, decrease, no change) on the Profit Margin, Current Ratio and Debt to Equity in the table below. Note that you must write either ‘increase’, ‘decrease’ or ‘no change’. Consider each transaction independently of all the other transactions. a. Drake Ltd borrowed an additional $200,000 as short-term, 6-month loan from the bank. b. Sold obsolete inventory purchased for $75,000 for $50,000 cash c. Paid $100,000 dividends to shareholders (previously declared)
Treynor Pie Company is a food company specializing in high-calorie snack foods. It is seeking to diversify its food business and lower its risks. It is examining three companies—a gourmet restaurant chain, a baby food company, and a nutritional products firm. Each of these companies can be bought at the same multiple of earnings. The following represents information about all the companies. Company Correlation withTreynor PieCompany Sales($ millions) Expected Earnings($ millions) Standard Deviationin Earnings($ millions) Treynor Pie Company +1.0 $ 151 $ 8 $4.0 Gourmet restaurant +0.6 63 7 1.2 Baby food company +0.3 59 3 1.9 Nutritional products company −0.8 75 5 3.4 a-1. Compute the coefficient of variation for each of the four companies. (Enter your answers in millions (e.g., $100,000 should be entered as ".10"). Round your answers to 3 decimal places.) a-2. Which company is the least risky?…
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Current Attempt in Progress You are considering investing in the grocery sector and have identified two companies for further analysis. Financial information for the two companies is as follows: (in thousands) Company Crane Company Cullumber Sales $1,940,000 $1,750,000 Cost of goods sold 1,746,000 1,505,000 Net income 103,000 99,000 Average inventory 151,000 218,000 Average total assets 786,000 755,476 (a) Calculate and compare the following ratios for the two companies: (Round inventory turnover to 2 decimal places, e.g. 15.25 and other answers to 1 decimal place, e.g. 18.4 or 15.3%.) i. Return on assets Homework Assignment Question 10 of 30 > Company Crane Company Cullumber Return on assets % Gross margin Profit margin Inventory turnover % % times % di % % times Days to sell inventory days days -/1
In some business models, like restaurants, revenue determines expenses. For example, a restaurant owner may find that labor and food costs should each be 30% of total revenue for the business model to work. As you run your business over time, you'll see certain patterns and limitations (e.g. cafes only have a certain number of seats) -- patterns in revenue to determine expenses. Please review and analyze the Financial Statement Model and explain each component in Dark Blue Such as % Growth per month, Revenue, Expenses, Operating Cash Flow, etc.
Q3. After analyzing financial statements of two companies of same industry: Shafer Company and Margo Company. Both are paying income taxes on their earnings, both have large inventories and Replacement cost of their product that are on the rise, over the years. A note to financial statements Disclosed that Shafer company is cost is shown far below to its replacement cost and Margo Inventory is shown at a cost close its current replacement cost. Required: Answer the following questions and explain the reasoning behind your answer. a. What method of inventory valuation is probably used by Shafer and Margo? b. Which company probably has been reporting the higher net income, support with figures? c. If both companies sold their entire inventory at the same sales price, which company would you? Expect to report the larger amount of gross profit, support with figures proving facts?

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