a.
Introduction:
Requirement 1
Total amount of assets invested in A and G in the current year.
b.
Introduction: The return on assets is a financial ratio which states that how profitably a company has employed its assets. In other words, how the company has utilized its assets to generate income.
Requirement 2
The return on assets of the company for the current year of A and G.
c.
Introduction: Expenses are incurred to generate revenues and thus, form an essential part of the income statement.
Requirement 3
The total expenses of the A and G company for the current year.
d.
Introduction: Comparison between similar companies in the same industry is crucial to the assessment of the company’s performance. A company’s financial ratios, when compared with the industry data, can reveal lots of valuable information which the financial statements can not reveal.
Requirement 4
The A’s and G’s return on assets for the current year is better or worse than the competitor’s average return.
e.
Introduction: Investors greatly rely on financial or accounting ratios along with the financial statements before making decisions for investing in a particular company. The limitations of financial statements can be removed by incorporating the ratios into the analysis and making investment decisions.
Requirement 5
Whether one should invest in G or A company based on return on assets.
![Check Mark](/static/check-mark.png)
Want to see the full answer?
Check out a sample textbook solution![Blurred answer](/static/blurred-answer.jpg)
Chapter 1 Solutions
FINANCIAL+MANAG.ACCT.
- How much are current-year expenses for (a) Apple and (b) Google?arrow_forward[The following information applies to the questions displayed below.] Simon Company's year-end balance sheets follow. At December 31 Assets Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets Current Year $ 27,970 80, 264 100,917 9,097 251,134 $ 469,382 Income tax expense Total costs and expenses Net income Liabilities and Equity Accounts payable Long-term notes payable Common stock, $10 par value Retained earnings Total liabilities and equity For both the current year and one year ago, compute the following ratios: $ 116,876 90,891 163,500 98,115 $ 469,382 $ 372,220 189,161 10,373 7,933 The company's income statements for the current year and 1 year ago, follow. For Year Ended December 31 Sales Cost of goods sold Other operating expenses Interest expense Current Year 1 Year Ago $ 31,400 58, 349 77,104 8,412 229,375 $ 404,640 Exercise 13-10 (Algo) Analyzing efficiency and profitability LO P3 $ 610,197 $ 70,436 92,137 163,500 78,567 $ 404,…arrow_forwardBb.40.arrow_forward
- Use the following Income Statement and Balance Sheet Information for 2018 to answer the question below. This is a Retail Company. All numbers are in Millions. Income Statement Total Sales213.8 Cost of Sales151.3 Gross Profit213.8-151.3 Selling and Administrative Expenses22.3 Research and Development 7.7 Depreciation and Amortization4.5 Other Income2.4 EBIT213.8-151.3-22.3-7.7-4.5+2.4 Interest Expense5.8 Pretax Income213.8-151.3-22.3-7.7-4.5+2.4-5.8 Taxes( 213.8-151.3-22.3-7.7-4.5+2.4-5.8 )*0.30 Net Income( 213.8-151.3-22.3-7.7-4.5+2.4-5.8 )*0.70 Balance Sheet Assets Liabilities Cash65.8Accounts Payable43.3Accounts Receivable54.4Notes Payable/Short term debt1.6Inventories4.4 Total Current Assets65.8+54.4+4.4Total Current Liabilities43.3+1.6 Net property, plant and equipment103.4Long-term debt80.0Total long-term assets103.4Total long-term debt liabilities80.0 Total Liabilities43.3+1.6+80.0 Stockholders' Equity (Total Equity)65.8+ 54.4+4.4+103.4-43.3-1.6-80.0Total…arrow_forwardHome Demo reported the following results. Sales $ 95 billion Net income $ 8 billion Average total assets $ 42 billion (a) Compute Home Demo's return on assets. (b) Is Home Demo's return on assets better than the 11% return of Lows Hardware (a competitor)?arrow_forward(This is what is in between the 1st and 2nd screenshot) Using these data, determine the following: Earnings per share. Round your answer to two decimal places. Price-to-earnings ratio. Round your answer to two decimal places. Book value per share. Round your answer to two decimal places. Market-to-book ratio. Round your answer to two decimal places. EV-EBITDA multiple. Assume the cost of sales includes $14 million in depreciation expenses. Assume there are no amortization expenses. Round your answer to two decimal places. How much of the retained earnings total was added during Year 1? Enter your answer in millions. For example, an answer of $1.2 million should be entered as 1.2, not 1,200,000. Round your answer to two decimal places.$ million Show Eastland’s new balance sheet after the company sells 1 million new common shares in early Year 2 to net $28 a share. Part of the proceeds, $12 million, is used to reduce current liabilities, and the remainder is temporarily…arrow_forward
- Activity Ratios Provide brief definition of what Activity ratios mean to the profitability of a company. What are the differences between Apple and Samsung in relationship to the ratios? See attached for ratios Total Asset Turnover Inventory Turnover Fixed Asset turnover Receivable Turnover 3. What does it mean to the company’s profitability? Is it good or bad?arrow_forwardPlease describe what is meant by “Times Interest Earned.” How is it calculated? Suppose you calculated this ratio for a company for two consecutive years and the results were the following: year 2018 – 24.0 year 2017 – 28.0 Please interpret the results. What conclusions can you draw?arrow_forwardPLEASE ANSWER WITH SOLUTIONSarrow_forward
- Fundamentals of Financial Management, Concise Edi...FinanceISBN:9781305635937Author:Eugene F. Brigham, Joel F. HoustonPublisher:Cengage Learning
- Fundamentals of Financial Management, Concise Edi...FinanceISBN:9781285065137Author:Eugene F. Brigham, Joel F. HoustonPublisher:Cengage LearningIntermediate Financial Management (MindTap Course...FinanceISBN:9781337395083Author:Eugene F. Brigham, Phillip R. DavesPublisher:Cengage Learning
![Text book image](https://www.bartleby.com/isbn_cover_images/9781305635937/9781305635937_smallCoverImage.gif)
![Text book image](https://www.bartleby.com/isbn_cover_images/9781285065137/9781285065137_smallCoverImage.gif)
![Text book image](https://www.bartleby.com/isbn_cover_images/9781337395083/9781337395083_smallCoverImage.gif)
![Text book image](https://www.bartleby.com/isbn_cover_images/9781337909730/9781337909730_smallCoverImage.gif)