*y three measures of liquidity calculated by FCI. . Identify three activity measures calculated by FCI. A 8. Identify four measures of profitability calculated by FCI. 9. Identify three measures of the extent of leverage calculated by FCI. LO3 de Enterprises LO4 LO5 Fo. Tdentify the two primary components of return on assets. 11. Identify the three primary components of return on common stockholders' equity. LO7 12. Identify the two market measures calculated by FCI. erprises LO8 13. Briefly describe five limitations of financial statement analysis. ratio SERIES A EXERCISES ents and ' E 24-1A (LO2) / (a) 2.00 to 1 /() $1,832,700 ANALYSIS OF LIQUIDITY Based on the comparative income statement and balance sheet of Cowan Kitchen Counters, Inc., that follow, compute the following liquidity measures for 20-2 (round all calculations to two decimal places): compo- omie leon(a) Quick or acid-test ratio He baue S-0 (b) Current ratio (c) Working capital -ises mmon borog onllo brs1omunsdeom n le 01 2/sb to 1o Cowan Kitchen Counters, Inc. Comparative Income Statement For Years Ended December 31, 20-2 and 20-1 2-994). 20-1 20-2 $2,163,000 $2,584,000 1,616,800 1,868,200 $ 715,800 Net Sales (all on account) $ 546,200 Cost of goods sold Gross profit Operating expenses Other expense (interest) Income tax expense 221,800 315,200 24,200 24,200 106,300 176,800 $ 193,900 $ 199,600 Net income Co(continued) 130 212 AMA boue lg lamib of n brodh our 600S,A2 an 982 PARTS Accounting for Corporations and Manufacturing Businesses Cowan Kitchen Counters, Inc. Comparative Balance Sheet December 31, 20-2 and 20-1 E 24-5 / asset 20-2 20-1 $ 255,400 $ 243,200 E 24- 250,000 250,000 / asse 903,500 797,500 Cash 983,600 913,600 Government notes E 24 / (a) Accounts receivable (net) 143,200 47,500 Merchandise inventory 108,200 108,200 Supplies and prepayments 330,000 390,600 Land 17,700 15,000 Building (net) Office equipment (net) $2,991,600 $2,765,600 Total assets $ 703,000 $ 532,000 Current liabilities (accounts payable) 220,000 240,000 Bonds payable $ 923,000 $ 772,000 lerlans Total liabilities $1,800,000 $1,800,000 Common stock ($10 par, 180,000 shares) 268,600 193,600 Retained earnings $2,068,600 $1,993,600 Total stockholders' equity $2,991,600 $2,765,600 Total liabilities and stockholders' equity -2A (LO3) 04 or 120.07 days 0 to 1 ANALYSIS OF ACTIVITY MEASURES Based on the financial statement data in Exer cise 24-1A, compute the following activity measures for 20-2 (rouŋd to two decimal places): (a) Accounts receivable

*y three measures of liquidity calculated by FCI. . Identify three activity measures calculated by FCI. A 8. Identify four measures of profitability calculated by FCI. 9. Identify three measures of the extent of leverage calculated by FCI. LO3 de Enterprises LO4 LO5 Fo. Tdentify the two primary components of return on assets. 11. Identify the three primary components of return on common stockholders' equity. LO7 12. Identify the two market measures calculated by FCI. erprises LO8 13. Briefly describe five limitations of financial statement analysis. ratio SERIES A EXERCISES ents and ' E 24-1A (LO2) / (a) 2.00 to 1 /() $1,832,700 ANALYSIS OF LIQUIDITY Based on the comparative income statement and balance sheet of Cowan Kitchen Counters, Inc., that follow, compute the following liquidity measures for 20-2 (round all calculations to two decimal places): compo- omie leon(a) Quick or acid-test ratio He baue S-0 (b) Current ratio (c) Working capital -ises mmon borog onllo brs1omunsdeom n le 01 2/sb to 1o Cowan Kitchen Counters, Inc. Comparative Income Statement For Years Ended December 31, 20-2 and 20-1 2-994). 20-1 20-2 $2,163,000 $2,584,000 1,616,800 1,868,200 $ 715,800 Net Sales (all on account) $ 546,200 Cost of goods sold Gross profit Operating expenses Other expense (interest) Income tax expense 221,800 315,200 24,200 24,200 106,300 176,800 $ 193,900 $ 199,600 Net income Co(continued) 130 212 AMA boue lg lamib of n brodh our 600S,A2 an 982 PARTS Accounting for Corporations and Manufacturing Businesses Cowan Kitchen Counters, Inc. Comparative Balance Sheet December 31, 20-2 and 20-1 E 24-5 / asset 20-2 20-1 $ 255,400 $ 243,200 E 24- 250,000 250,000 / asse 903,500 797,500 Cash 983,600 913,600 Government notes E 24 / (a) Accounts receivable (net) 143,200 47,500 Merchandise inventory 108,200 108,200 Supplies and prepayments 330,000 390,600 Land 17,700 15,000 Building (net) Office equipment (net) $2,991,600 $2,765,600 Total assets $ 703,000 $ 532,000 Current liabilities (accounts payable) 220,000 240,000 Bonds payable $ 923,000 $ 772,000 lerlans Total liabilities $1,800,000 $1,800,000 Common stock ($10 par, 180,000 shares) 268,600 193,600 Retained earnings $2,068,600 $1,993,600 Total stockholders' equity $2,991,600 $2,765,600 Total liabilities and stockholders' equity -2A (LO3) 04 or 120.07 days 0 to 1 ANALYSIS OF ACTIVITY MEASURES Based on the financial statement data in Exer cise 24-1A, compute the following activity measures for 20-2 (rouŋd to two decimal places): (a) Accounts receivable

Entrepreneurial Finance

6th Edition

ISBN:9781337635653

Author:Leach

Publisher:Leach

Chapter9: Projecting Financial Statements

Section: Chapter Questions

Problem 1aM

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