Times Interest EarnedSprout Company reported the following on the company's income statement in two recent years:Current YearPrior YearInterest expense$467,000$560,400Income before income tax expense6,911,6007,733,520a. Determine the times interest earned ratio for the current year and the prior year. Round to one decimal place.cutent YearPrior Yearb. Is the times interest earned ratio improving or declining?

Times interest earned ratio shows ability of the business in meeting debt obligations with the help…

Answered: Times Interest Earned Sprout Company…

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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Accounts Receivable Turnover and Average Collection Period The Forrester Corporation disclosed the following financial information (in millions) in its recent annual report: Net Sales Beginning Accounts Receivable (net) Ending Accounts Receivable (net) Previous Year Current Year $67,096 3,896 3,696 $81,662 3,696 3,598 a. Calculate the accounts receivable turnover ratio for both years. (Round your answer to two decimal points.) b. Calculate the average collection period for both years. (Use 365 days for calculation. Round to the nearest whole number.) c. Is the company's accounts receivable management improving or deteriorating? a. Accounts receivable turnover b. Average collection period Previous Year 17.7 x Current Year 22.4 x 21▾ 16 c. The company's receivable management Improved Check
Prepare a horizontal analysis of Nebraska Technologies's income statements. For decreases or negative numbers use a minus sign. Round percentages to one decimal place. Year 1 Increase (Decrease) Percent Favorable/Unfavorable 1 2 3 4 5 6 7 Sales Wage expense Rent expense Utilities expense Total operating expenses Net income Year 2 $158,400.00 $80,000.00 28,000.00 30,000.00 $138,000.00 $162,500.00 $92,500.00 30,000.00 25,000.00 $147,500.00 $20,400.00 $15,000.00
Assume the following sales data for a company: Line Item Description Amount Current year $883,993 Preceding year 542,076 What is the percentage increase in sales from the preceding year to the current year? a. 63.08% b. 61.32% c. 163.08% d. 38.68%
Accounts Receivable Turnover and Average Collection Period The Forrester Corporation disclosed the following financial information (in millions) in its recent annual report: Previous Year Current Year Net Sales $157,105 $171,669 Beginning Accounts Receivable (net) 11,899 11,369 Ending Accounts Receivable (net) 11,369 11,544 Calculate the accounts receivable turnover ratio for both years. (Round your answer to two decimal points.) Calculate the average collection period for both years. (Use 365 days for calculation. Round to the nearest whole number.) Is the company's accounts receivable management improving or deteriorating? Previous Year Current Year a. Accounts receivable turnover Answer Answer b. Average collection period Answer Answer c. The company's receivable management Answer
8
Vertical Analysis of Income Statement Revenue and expense data for Innovation Quarter Inc. for two recent years are as follows: Previous Year Sales Cost of goods sold Selling expenses Administrative expenses Income tax expense Current Year $447,000 272,670 71,520 71,520 13,410 $384,000 215,040 69,120 57,600 15,360
Return on Total Assets A company reports the following income statement and balance sheet information for the current year: Net income $661,910Interest expense 116,810Average total assets 6,280,000Determine the return on total assets. If required, round the answer to one decimal place.fill in the blank 1 %
Suppose the 2022 financial statements of 3M Company report net sales of $23.1 billion. Accounts receivable (net) are $3.2 billion at the beginning of the year and $3.25 billion at the end of the year. Compute 3M’s accounts receivable turnover. - Accounts Recievable turnover ratio=? (times) Compute 3M’s average collection period for accounts receivable in days - Average collection period =? (days)
Express the following comparative income statements in common-size percents. Using the common-size percents, which item is most responsible for the decline in net income? Complete this question by entering your answers in the tabs below. Income Statement Reason for Decline in Net Income Express the following comparative income statements in common-size percents. Note: Round your percentage answers to 1 decimal place. GOMEZ CORPORATION Comparative Income Statements For Years Ended December 31 Current Year $ Current Year % Prior Year $ Prior Year % Sales $ 725,000 100.0 $ 665,000 Cost of goods sold 562,700 1.0 291,000 Gross profit 162,300 0.4 374,000 Operating expenses 129,200 268,400 Net income 33,100 $ 105,600 Income Statement Reason for Decline in Net Income >
The financial statements of the Sunland Company report net sales of $384000 and accounts receivable of $50400 and $33600 at the beginning of the year and the end of the year, respectively. What is the average collection period for accounts receivable in days?
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Activity measures: m. Calculate the accounts receivable turnover and number of days' sales in accounts receivable (based on a 365-day year) for the most recent year. n. Based on your analysis in m, do you believe that the company is doing an effective job at managing accounts receivable? What would you estimate the industry averages to be for the accounts receivable turnover and number of days' sales in accounts receivable? Explain. o. Calculate the inventory turnover and number of days' sales in inventory (based on a 365-day year) for the most recent year. p. Based on your analysis in o, to what extent does the company need to be concerned about its inventory management policies? In assessing the inventory management policies, would you be more interested in knowing current ratio or acid-test ratio information? Explain.

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