The following financial ratios have been calculated for Nova Ltd for the year ended 30 June 2008:BudgetedresultsActualPrevious yearIndustry averageresultsCurrent ratio1.971.921.871.92Quick asset ratio1.061.061.061.11Inventory turnover4.214.914.864.76Net profit ratio0.050.030.030.03Gross margin0.650.590.610.61Required:Provide four (4) possible explanations for the results for the various ratios for Solar Ltd and outlinetheir implications for the audit.

The ratio refers to the quantitative relation between 2 figures that results in the number of times…

Answered: The following financial ratios have…

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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A condensed income statement for Weber Associates and a partially completed vertical analysis follow. Required: 1. Complete the vertical analysis by computing each missing line item as a percentage of net revenues. TIP: In the prior year, Cost of Goods Sold was 31 percent of Net Revenues, computed as ($1,397 ÷ $4,571). 2. Does Cost of Goods Sold, as a percentage of Net Revenues, represent better or worse performance in 2019 as compared to 2018? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Complete the vertical analysis by computing each missing line item as a percentage of net revenues. TIP: In the prior year, Cost of Goods Sold was 31 percent of Net Revenues, computed as ($1,397 ÷ $4,571). (Decreases should be indicated by a minus sign. Round your answers to the nearest whole percent.) Net Revenues Cost of Goods Sold Research and Development Expense Sales and Marketing Expense General and Administrative Expense Income from Operations Other…
Make Analysis into an evaluation of the firm’s liquidity, activity, debt, profitability and market ratios. Historical and Industry Average Ratios HTS Software , Inc. Industry Ratio 2010 2011 2011 Liquidity Ratios Current Ratio 2.6 2.08 2.7 Quick Ratio 1.8 1.32 1.75 Activity Ratios Inventory Turnover 4.5 3.00 4.7 Average Collection Period 40days 53days 42 days Total Asset Turnover 1.2 0.80 1 Debt Ratios Debt Ratio 20% 28% 21% Times Interest Earned 9 6 8.9 Profitability Ratios Gross Profit Margin 43% 43% 44% Operating Profit Margin 30% 26% 32% Net Profit Margin 20% 17% 21% Return on total assets 12% 14% 13% Return on Equity 15% 19% 16% Market Ratios Price/Earnings Ratio 7.3 4.4 8
A company reports the following amounts at the end of the year: Total sales revenue = $560,000; sales discounts = $17,000; sales returns = $34,000; sales allowances = $20,000. Compute net revenues. Net revenues
BC Training reports sales revenue of $2,800,000. Average inventory during the year was $130,000. The inventory turnover ratio for the year is 8.0.What amount of gross profit would the company report in its income statement? Gross profit
Calculating the Times-Interest-Earned Ratio Beech Company provided the following income statement for last year: Sales $24,350,735 Cost of goods sold 15,300,000 Gross margin $9,050,735 Operating expenses 4,910,685 Operating income $4,140,050 Interest expense 470,015 Income before taxes $3,670,035 Income taxes 1,461,214 Net income $2,208,821 Required: Calculate the times-interest-earned ratio. Round the answer to one decimal place.times
Calculating the Times-Interest-Earned Ratio Beech Company provided the following income statement for last year: Sales $24,350,735 Cost of goods sold 15,300,000 Gross margin $9,050,735 Operating expenses 4,910,685 Operating income $4,140,050 Interest expense 463,015 Income before taxes $3,677,035 Income taxes 1,461,214 Net income $2,215,821 Required: Calculate the times-interest-earned ratio. Round the answer to one decimal place.fill in the blank 1
Use the following selected information from Corolla to determine the Year 1 and Year 2 trend percentages for net sales using Year 1 as the base. Year 2 Year 1 Net sales $ 277,700 $ 231,700 Cost of goods sold 151,600 129,890 Operating expenses 54,940 52,940 Net earnings 28,320 20,120 Multiple Choice 116.7% for Year 2 and 100.0% for Year 1. 54.6% for Year 2 and 56.1% for Year 1. 36.2% for Year 2 and 40.8% for Year 1. 65.6% for Year 2 and 64.6% for Year 1. 119.9% for Year 2 and 100.0% for Year 1.
Bergo Bay's accounting system generated the following account balances on December 31. The company's manager knows something is wrong with this list of balances because it does not show any balance for Work in Process Inventory, and the accrued factory payroll (Factory Wages Payable) has not been recorded. Cash Accounts receivable Raw materials inventory Work in process inventory Finished goods inventory Prepaid rent Accounts payable Notes payable Common stock Retained earnings (prior year) Sales Cost of goods sold Factory overhead General and administrative expenses Totals Debit Credit $ 79,000 48,000 29,000 0 12,000 4,000 $ 9,200 12,200 40,000 82,000 197,600 107,000 27,000 35,000 $ 341,000 $ 341,000 These six documents must be processed to bring the accounting records up to date. Materials requisition 10: Materials requisition 11: Materials requisition 12: Labor time ticket 52: Labor time ticket 53: Labor time ticket 54: $ 4,100 direct materials to Job 402. $ 7,400 direct materials…
Financial Accounting ‏
Common-size and trend percents for Roxi Company's sales, cost of goods sold, and expenses follow. Common-Size Percents Trend Percents Current 2 Years Year 1 Year Ago Sales 100.0% 100.0% Ago 100.0% Current Year 103.7% 2 Years 1 Year Ago Ago 102.5% 100.0% Cost of goods sold 63.3 61.1 56.7 115.8 110.5 100.0 Operating expenses 14.2 13.7 14.0 105.2 100.3 100.0 Determine the net income for the following years. Did the net income increase, decrease, or remain unchanged in this three-year period? Complete this question by entering your answers in the tabs below. Change in Net Income Net Income Determine the net income for the following years. Assuming sales were $100,000 2 yrs ago, what is net income in each year? Note: Enter all amounts as positive values. Sales Cost of Goods Sold Operating Expenses Net Income Current Year 1 Year Ago 2 Years Ago $ 100,000 56,700 14,000 $ 29,300 < Change in Net Income Nachicome D

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