Financial Accounting: Tools for Business Decision Making, 8th Edition
8th Edition
ISBN: 9781118953808
Author: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso
Publisher: WILEY
expand_more
expand_more
format_list_bulleted
Videos
Question
Chapter 13, Problem 13.1EYCT
a.
To determine
Trend analysis: Trend analysis is one form of horizontal analysis. It helps the user to calculate the changes that occur in the economic cycle of a business for many years in terms of percentage change using one of the years as the base year.
To prepare: Trend analysis for A corporation.
b.
To determine
To compute: Debt to asset ratio and times interest earned ratio.
c.
To determine
To compute: Profit margin, asset turnover, return on assets and return on common
d.
To determine
The information outside the annual report may also be useful to your parents in making a decision about Company A.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
The right side of the balance sheet shows the firm's liabilities and stockholders' equity.
Which of the following best describes shareholders' equity?
O Equity is the sum of what the initial stockholders paid when they bought company shares and the earnings that the company has retained
over the years.
O Equity is the difference between the paid-in capital and retained earnings.
NOW Inc. released its annual results and financial statements. Grace is reading the summary in the business pages of today's paper. In its annual
report this year, NOW Inc. reported a net income of $132 million. Last year, the company reported a retained earnings balance of $561 million,
whereas this year it increased to $660 million. How much was paid out in dividends this year?
O $170 million
O $231 million
O $33 million
O $5 million
Assuming a company has net income for the year, the end of year dollar balance in the "Total Stockholders' Equity" column
of the statement of stockholders' equity should exactly match which of the following:
Select one:
a. The total cash balance on the balance sheet
b. The total paid-in capital balance on the balance sheet
c. The total liabilities balance on the balance sheet
d. the total stockholders' equity balance on the balance sheet
e. The total assets balance on the balance sheet
f. The net income amount on the income statement
Win's Companies, a home improvement store chain, reported the following summanzed figures
E (Click the icon to view the income statement.)
E (Click the icon to view the balance sheets.)
Win's has 20,000 common shares outstanding during 2018.
Read the requirements
Requirement 1. Compute Win's Companies' current ratio at May 31, 2018 and 2017
Begin by selecting the formula to calculate Win's Companies' current ratio. Then enter the amounts and calcu ale the current ratio for 2018 and then 2017. (Round your answers to two decimal places, X.XX.)
Current ratio
(i Balance Sheets
Income Statement
Win's Companies
Win's Companies
Balance Sheet
Income Statement
May 31, 2018 and 2017
Years Ended May 31, 2018 and 2017
Assets
Liabilities
2018
2017
2018
2017
2018
2017
Net Sales Revenue
24
57 200 $
39,800
Cash
$.
2.300 $
1300 Total Current Liabilities
22,000 $
12,900
Cost of Goods Sold
22.500
25,500
12,200
11,300
Short-term Invesiments
29 000
13.000 Long-term Liabilities
Interest Expense
500
320…
Chapter 13 Solutions
Financial Accounting: Tools for Business Decision Making, 8th Edition
Ch. 13 - Prob. 1QCh. 13 - Prob. 2QCh. 13 - Prob. 3QCh. 13 - Prob. 4QCh. 13 - Prob. 5QCh. 13 - Prob. 6QCh. 13 - Prob. 7QCh. 13 - Prob. 8QCh. 13 - Prob. 9QCh. 13 - (a) Distinguish among the following bases of...
Ch. 13 - Prob. 11QCh. 13 - Prob. 12QCh. 13 - Prob. 13QCh. 13 - Prob. 14QCh. 13 - Prob. 15QCh. 13 - Prob. 16QCh. 13 - Prob. 17QCh. 13 - Prob. 18QCh. 13 - Prob. 19QCh. 13 - Prob. 20QCh. 13 - Prob. 21QCh. 13 - Prob. 22QCh. 13 - Prob. 13.1BECh. 13 - Prob. 13.2BECh. 13 - Prob. 13.3BECh. 13 - Prob. 13.4BECh. 13 - Prob. 13.5BECh. 13 - Prob. 13.6BECh. 13 - Prob. 13.7BECh. 13 - Prob. 13.8BECh. 13 - Prob. 13.9BECh. 13 - Prob. 13.10BECh. 13 - Prob. 13.11BECh. 13 - Prob. 13.12BECh. 13 - Prob. 13.13BECh. 13 - Prob. 13.14BECh. 13 - Prob. 13.15BECh. 13 - Prob. 13.1DIECh. 13 - Prob. 13.2DIECh. 13 - Prob. 13.3DIECh. 13 - Prob. 13.1ECh. 13 - Prob. 13.2ECh. 13 - Prob. 13.3ECh. 13 - Prob. 13.4ECh. 13 - Prob. 13.5ECh. 13 - Prob. 13.6ECh. 13 - Prob. 13.7ECh. 13 - Prob. 13.8ECh. 13 - Prob. 13.9ECh. 13 - Prob. 13.10ECh. 13 - Prob. 13.11ECh. 13 - Prob. 13.12ECh. 13 - Prob. 13.13ECh. 13 - Prob. 13.1APCh. 13 - Prob. 13.2APCh. 13 - Prob. 13.3APCh. 13 - Prob. 13.4APCh. 13 - Prob. 13.5APCh. 13 - Prob. 13.1EYCTCh. 13 - Prob. 13.2EYCTCh. 13 - Prob. 13.3EYCTCh. 13 - Prob. 13.4EYCTCh. 13 - Prob. 13.7EYCTCh. 13 - Prob. 13.8EYCTCh. 13 - Prob. 13.9EYCTCh. 13 - Prob. 13.1IFRS
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.Similar questions
- Using the Value Line Investment Survey report in Exhibit 11.5, find the following information for Apple. What was the amount of revenues (i.e., sales) generated by the company in 2017? What were the latest annual dividends per share and dividend yield? What is the earnings per share (EPS) projection for 2019? How many shares of common stock were outstanding? What were the book value per share and EPS in 2017? How much long-term debt did the company have in the third quarter of 2018?arrow_forwardBarry’s Superstore wishes to prepare financial plans. Use the financial statements on the next page and the other information provided below to prepare the financial plans. The following financial data are also available: (1) The firm has estimated that its sales for next year will be $130,000. (2) The firm expects to pay $30,000 in cash dividends. (3) The firm wishes to maintain a minimum cash balance of $25,000. (4) Accounts receivable represent approximately 20% of annual sales. (5) The firm’s ending inventory represents 60% of Cost of Goods Sold. (6) A new machine costing $15,000 will be purchased next year. (7) Accounts payable will increase by 5%. (8) Unearned Revenue will be earned. (9) Notes Payable would decrease by $5000. (10) Short-Term Investments and common stock will remain unchanged. Requirement: a. Prepare a pro forma income statement for the year ended December 31, 2021, using the percent-of-sales method. Tax Rate is expected to be 15%. b. Prepare a pro forma balance…arrow_forwardBarry’s Superstore wishes to prepare financial plans. Use the financial statements on the next page and the other information provided below to prepare the financial plans. The following financial data are also available: (1) The firm has estimated that its sales for next year will be $130,000. (2) The firm expects to pay $30,000 in cash dividends. (3) The firm wishes to maintain a minimum cash balance of $25,000. (4) Accounts receivable represent approximately 20% of annual sales. (5) The firm’s ending inventory represents 60% of Cost of Goods Sold. (6) A new machine costing $15,000 will be purchased next year. (7) Accounts payable will increase by 5%. (8) Unearned Revenue will be earned. (9) Notes Payable would decrease by $5000. (10) Short-Term Investments and common stock will remain unchanged. Requirement: Prepare a pro forma income statement for the year ended December 31, 2021, using the percent-of-sales method. Tax Rate is expected to be 15%. Prepare a pro forma balance…arrow_forward
- Mike Sanders is considering the purchase of Kepler Company, a firm specializing in the manufacture of office supplies. To be able to assess the financial capabilities of the company, Mike has been given the companys financial statements for the 2 most recent years. Required: Note: Round all answers to two decimal places. 1. Compute the following for each year: (a) return on assets, (b) return on stockholders equity, (c) earnings per share, (d) price-earnings ratio, (e) dividend yield, and (f ) dividend payout ratio. 2. CONCEPTUAL CONNECTION Based on the analysis in Requirement 1, would you invest in the common stock of Kepler?arrow_forwardVishnuarrow_forwardThe following information was taken from the Netflix financial statements. For Netflix, sales is the product of the number of subscribers and the price charged for each subscription. What observations can you make about the previous three years of Netflixs sales? Given this data, provide any predictions you can make about the future financial performance of Netflix. What nonfinancial factors influenced that prediction?arrow_forward
- The following information is taken from the records of Baklava Bakery for the year 2019. A. Calculate net income or net loss for January. B. Calculate net income or net loss for February. C. Calculate net income or net loss for March. D. For each situation, comment on how a stakeholder might view the firms performance. (Hint: Think about the source of the income or loss.)arrow_forward- Your answer is partially correct. Make a 5-year trend analysis, using 2016 as the base year, of (1) net sales and (2) net income. Comment on the significance of the trend results. (To satisfy this requirement you must access information regarding performance in prior years. This information is provided in the complete annual report available on the company's website.) (Round percentages to 0 decimal places, eg. 15% and enter amounts in millions) (1) Net sales Trend (2) Net income Trend $ $ eTextbook and Media 2020 274515 27 57411 26 % % $ $ 2019 APPLE INC. Trend Analysis of Net Sales and Net Income For the Five Years Ended 2020 2018 260174 21 55256 21 % % $ $ PRAL 265595 23 59531 30 % % $ $ 2017 229234 6 48351 6 % % $ $ 2016 215639 0 45687 0 % % Assistance Usedarrow_forwardConduct a report and explain at least 4 horizontal and vertical analysis each of the company’s financial statements to identify trends and patterns over the past two years. b) Clearly explain all the analysis a of the company’s financial performance, for shareholders and potential investors, using the trends identified in (a) above and in the context of market and other trends and expectations mentioned in the MDA section of the Annual Report. c) Briefly explain how the analysis at (b) would be modified if it was prepared for stakeholders other than shareholders and investors.arrow_forward
- You have inherited money from your grandparents, and a friend suggests that you consider buying shares in Wildhorse Ski Products, which manufactures skis and bindings. Because you may need to sell the shares within the next two years to finance your university education, you start your analysis of the company data by calculating (1) working capital, (2) the current ratio, and (3) the quick ratio. Wildhorse’s statement of financial position is as follows: Current assets Cash $148,700 Inventory 168,800 Prepaid expenses 20,453 Non-current assets Land 47,600 Building and equipment 137,800 Other 15,700 Total $539,053 Current liabilities $161,700 Long-term debt 200,700 Share capital 87,200 Retained earnings 89,453 Total $539,053 (a1) What amount of working capital is currently maintained? $________ (b1)Your preference is to have a quick ratio of at least 0.80 and a current ratio of at least 2.00. How do the existing ratios compare with your criteria? (Round answers to 2 decimal places,…arrow_forwardhello, I need help pleasearrow_forwardSubjevct : Accountingarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Managerial Accounting: The Cornerstone of Busines...AccountingISBN:9781337115773Author:Maryanne M. Mowen, Don R. Hansen, Dan L. HeitgerPublisher:Cengage Learning
Century 21 Accounting Multicolumn JournalAccountingISBN:9781337679503Author:GilbertsonPublisher:Cengage
Pfin (with Mindtap, 1 Term Printed Access Card) (...FinanceISBN:9780357033609Author:Randall Billingsley, Lawrence J. Gitman, Michael D. JoehnkPublisher:Cengage Learning
Fundamentals of Financial Management, Concise Edi...FinanceISBN:9781305635937Author:Eugene F. Brigham, Joel F. HoustonPublisher:Cengage Learning
Excel Applications for Accounting PrinciplesAccountingISBN:9781111581565Author:Gaylord N. SmithPublisher:Cengage Learning
Managerial Accounting: The Cornerstone of Busines...
Accounting
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Cengage Learning
Century 21 Accounting Multicolumn Journal
Accounting
ISBN:9781337679503
Author:Gilbertson
Publisher:Cengage
Pfin (with Mindtap, 1 Term Printed Access Card) (...
Finance
ISBN:9780357033609
Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher:Cengage Learning
Fundamentals of Financial Management, Concise Edi...
Finance
ISBN:9781305635937
Author:Eugene F. Brigham, Joel F. Houston
Publisher:Cengage Learning
Excel Applications for Accounting Principles
Accounting
ISBN:9781111581565
Author:Gaylord N. Smith
Publisher:Cengage Learning
Financial ratio analysis; Author: The Finance Storyteller;https://www.youtube.com/watch?v=MTq7HuvoGck;License: Standard Youtube License