Use the information in the table below to calculate the following ratios for Windswept Woodworks for year 1 and year 2. Windswept Woodworks, Incorporated Input Data (millions of dollars) Year 2 Year 1 Accounts payable Accounts receivable Accumulated depreciation Cash & equivalents Common stock Cost of goods sold Depreciation expense Common stock dividends paid Interest expense Inventory Addition to retained earnings Long-term debt Notes payable Gross plant & equipment Retained earnings 542 1,386 6,852 330 474 920 6,722 218 1,210 1,290 1,510 n.a. n.a. n.a. 150 1,120 602 918 n.a. 1,116 n.a. 826 390 10,040 2,566 240 10,300 3,168 3,028 126 21% $ 19.80 500 million Sales n.a. Other current liabilities Tax rate Market price per share - year end Number of shares outstanding 106 n.a. $ 17.50 500 million (For all requirements, round your answers to 2 decimal places.) Required: a. Interest coverage ratio (Assume that year 1 EBIT was 1,307 and year 1 interest expense was 120.) Answer is complete and correct. Year 2 interest coverage ratio Year 1 interest coverage ratio 9.25 10.89 O b. Averege collection period (Assume that the accounts receivable balence was 960 on December 31 of the previous year and that year 1 sales were 2,728.) (Use 365 days in a year.)
Use the information in the table below to calculate the following ratios for Windswept Woodworks for year 1 and year 2. Windswept Woodworks, Incorporated Input Data (millions of dollars) Year 2 Year 1 Accounts payable Accounts receivable Accumulated depreciation Cash & equivalents Common stock Cost of goods sold Depreciation expense Common stock dividends paid Interest expense Inventory Addition to retained earnings Long-term debt Notes payable Gross plant & equipment Retained earnings 542 1,386 6,852 330 474 920 6,722 218 1,210 1,290 1,510 n.a. n.a. n.a. 150 1,120 602 918 n.a. 1,116 n.a. 826 390 10,040 2,566 240 10,300 3,168 3,028 126 21% $ 19.80 500 million Sales n.a. Other current liabilities Tax rate Market price per share - year end Number of shares outstanding 106 n.a. $ 17.50 500 million (For all requirements, round your answers to 2 decimal places.) Required: a. Interest coverage ratio (Assume that year 1 EBIT was 1,307 and year 1 interest expense was 120.) Answer is complete and correct. Year 2 interest coverage ratio Year 1 interest coverage ratio 9.25 10.89 O b. Averege collection period (Assume that the accounts receivable balence was 960 on December 31 of the previous year and that year 1 sales were 2,728.) (Use 365 days in a year.)
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 39E: Cuneo Companys income statements for the last 3 years are as follows: Refer to the information for...
Related questions
Question
6
![Use the information in the table below to calculate the following ratios for Windswept Woodworks for year 1 and year 2.
Windswept woodworks, Incorporated
Input Data
(millions of dollars)
Year 2
Year 1
Accounts payable
Accounts receivable
Accumulated depreciation
Cash & equivalents
Common stock
Cost of goods sold
Depreciation expense
Common stock dividends paid
Interest expense
Inventory
Addition to retained earnings
Long-term debt
Notes payable
Gross plant & equipment
Retained earnings
542
474
1,386
6,852
330
920
6,722
218
1,290
1,510
1,210
n.a.
n.a.
n.a.
150
1,120
602
918
n.a.
1,116
n.a.
826
240
10,300
3,168
3,028
126
21%
$ 19.80
500 million
390
10,040
2,566
Sales
n.a.
Other current liabilities
Tax rate
Market price per share - year end
Number of shares outstanding
106
n.a.
$ 17.50
500 million
(For all requirements, round your answers to 2 decimal places.)
Required:
e. Interest coverage ratio (Assume that year 1 EBIT was 1,307 and year 1 interest expense was 120.)
Answer is complete and correct.
Year 2 interest coverage ratio
9.25 O
Year 1 interest coverage ratio
10.89
b. Averege collection period (Assume that the occounts receivable bolonce was 960 on December 31 of the previous yeor and thot
year 1 sales were 2,728.) (Use 365 days in a year.)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F714ec5cc-ca4e-4c5b-814c-de61801b113c%2F68ce92f8-102e-4972-ba94-3ef8decc05e0%2Fily3fmo_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Use the information in the table below to calculate the following ratios for Windswept Woodworks for year 1 and year 2.
Windswept woodworks, Incorporated
Input Data
(millions of dollars)
Year 2
Year 1
Accounts payable
Accounts receivable
Accumulated depreciation
Cash & equivalents
Common stock
Cost of goods sold
Depreciation expense
Common stock dividends paid
Interest expense
Inventory
Addition to retained earnings
Long-term debt
Notes payable
Gross plant & equipment
Retained earnings
542
474
1,386
6,852
330
920
6,722
218
1,290
1,510
1,210
n.a.
n.a.
n.a.
150
1,120
602
918
n.a.
1,116
n.a.
826
240
10,300
3,168
3,028
126
21%
$ 19.80
500 million
390
10,040
2,566
Sales
n.a.
Other current liabilities
Tax rate
Market price per share - year end
Number of shares outstanding
106
n.a.
$ 17.50
500 million
(For all requirements, round your answers to 2 decimal places.)
Required:
e. Interest coverage ratio (Assume that year 1 EBIT was 1,307 and year 1 interest expense was 120.)
Answer is complete and correct.
Year 2 interest coverage ratio
9.25 O
Year 1 interest coverage ratio
10.89
b. Averege collection period (Assume that the occounts receivable bolonce was 960 on December 31 of the previous yeor and thot
year 1 sales were 2,728.) (Use 365 days in a year.)
![b. Average collection period (Assume that the accounts receivable balance was 960 on December 31 of the previous year and that
year 1 sales were 2,728.) (Use 365 days in a year.)
Answer is complete and correct.
138.98
Year 2 ACP
Year 1 ACP
days
125.77 O days
c. Current ratio
O Answer is complete but not entirely correct.
Year 2 current ratio
Year 1 current ratio
4.25 8
3.89 O
d. Quick ratio
Answer is complete but not entirely correct.
Year 2 quick ratio
Year 1 quick ratio
2.57 X
1.96 0](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F714ec5cc-ca4e-4c5b-814c-de61801b113c%2F68ce92f8-102e-4972-ba94-3ef8decc05e0%2Ftg0qx0s_processed.jpeg&w=3840&q=75)
Transcribed Image Text:b. Average collection period (Assume that the accounts receivable balance was 960 on December 31 of the previous year and that
year 1 sales were 2,728.) (Use 365 days in a year.)
Answer is complete and correct.
138.98
Year 2 ACP
Year 1 ACP
days
125.77 O days
c. Current ratio
O Answer is complete but not entirely correct.
Year 2 current ratio
Year 1 current ratio
4.25 8
3.89 O
d. Quick ratio
Answer is complete but not entirely correct.
Year 2 quick ratio
Year 1 quick ratio
2.57 X
1.96 0
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
![Managerial Accounting: The Cornerstone of Busines…](https://www.bartleby.com/isbn_cover_images/9781337115773/9781337115773_smallCoverImage.gif)
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning
![Financial Accounting: The Impact on Decision Make…](https://www.bartleby.com/isbn_cover_images/9781305654174/9781305654174_smallCoverImage.gif)
Financial Accounting: The Impact on Decision Make…
Accounting
ISBN:
9781305654174
Author:
Gary A. Porter, Curtis L. Norton
Publisher:
Cengage Learning
![Cornerstones of Financial Accounting](https://www.bartleby.com/isbn_cover_images/9781337690881/9781337690881_smallCoverImage.gif)
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
![Managerial Accounting: The Cornerstone of Busines…](https://www.bartleby.com/isbn_cover_images/9781337115773/9781337115773_smallCoverImage.gif)
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning
![Financial Accounting: The Impact on Decision Make…](https://www.bartleby.com/isbn_cover_images/9781305654174/9781305654174_smallCoverImage.gif)
Financial Accounting: The Impact on Decision Make…
Accounting
ISBN:
9781305654174
Author:
Gary A. Porter, Curtis L. Norton
Publisher:
Cengage Learning
![Cornerstones of Financial Accounting](https://www.bartleby.com/isbn_cover_images/9781337690881/9781337690881_smallCoverImage.gif)
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
![Survey of Accounting (Accounting I)](https://www.bartleby.com/isbn_cover_images/9781305961883/9781305961883_smallCoverImage.gif)
Survey of Accounting (Accounting I)
Accounting
ISBN:
9781305961883
Author:
Carl Warren
Publisher:
Cengage Learning
![Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781337912020/9781337912020_smallCoverImage.jpg)
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
![Financial Accounting](https://www.bartleby.com/isbn_cover_images/9781337272124/9781337272124_smallCoverImage.gif)
Financial Accounting
Accounting
ISBN:
9781337272124
Author:
Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:
Cengage Learning