Concept explainers
Videos
1.
Concept Introduction:
Financial ratios: Ratio helps investor and the company to analyze the growth of the business. It helps to take decisions to management of business and helps investor in taking the decision of investment. Financial ratio also helps to compare the company with previous data and from other companies.
To Calculate:
Gross Margin (with or without service revenue) and net profit margin ratio.
1.
Answer to Problem 13SP
| Gross profit Margin (L/B)*100 | 24.8% |
| Gross profit Margin (M/C)*100 | 68.1% |
| Net Profit Margin (E/C)*100 | 42.8% |
Explanation of Solution
| Computer Services Revenue (A) | 25307 |
| Net Sales (B) | 18693 |
| Total Sales and revenue (C) | 44000 |
| Cost of goods sold (D) | 14052 |
| Net Income (E) | 18833 |
| Quick Assets (F) | 90924 |
| Current Assets (G) | 95568 |
| Total Assets (H) | 120268 |
| Current liabilities (I) | 875 |
| Total Liabilities (J) | 875 |
| Total Equities (K) | 119393 |
| Gross Profit (without service revenue)(B-D)= L | 4641 |
| Gross Profit (with service revenue) (C-D)= M | 29948 |
| Gross profit Margin (L/B)*100 | 24.8% |
| Gross profit Margin (M/C)*100 | 68.1% |
| Net Profit Margin (E/C)*100 | 42.8% |
2.
Concept Introduction:
Financial ratios: Ratio helps investor and the company to analyze the growth of the business. It helps to take decisions to management of business and helps investor in taking the decision of investment. Financial ratio also helps to compare the company with previous data and from other companies.
To Calculate:
2.
Answer to Problem 13SP
| Current Ratio (G/I) | 109.2 |
| Quick Ratio (F/I) | 103.9 |
Explanation of Solution
| Computer Services Revenue (A) | 25307 |
| Net Sales (B) | 18693 |
| Total Sales and revenue (C) | 44000 |
| Cost of goods sold (D) | 14052 |
| Net Income (E) | 18833 |
| Quick Assets (F) | 90924 |
| Current Assets (G) | 95568 |
| Total Assets (H) | 120268 |
| Current liabilities (I) | 875 |
| Total Liabilities (J) | 875 |
| Total Equities (K) | 119393 |
| Current Ratio (G/I) | 109.2 |
| Quick Ratio (F/I) | 103.9 |
3.
Concept Introduction:
Financial ratios: Ratio helps investor and the company to analyze the growth of the business. It helps to take decisions to management of business and helps investor in taking the decision of investment. Financial ratio also helps to compare the company with previous data and from other companies.
To Calculate:
Debt ratio and Equity ratio.
3.
Answer to Problem 13SP
| Debt ratio (J/H)*100 | 0.7% |
| Equity ratio (K/H)*100 | 99.3% |
Explanation of Solution
| Computer Services Revenue (A) | 25307 |
| Net Sales (B) | 18693 |
| Total Sales and revenue (C) | 44000 |
| Cost of goods sold (D) | 14052 |
| Net Income (E) | 18833 |
| Quick Assets (F) | 90924 |
| Current Assets (G) | 95568 |
| Total Assets (H) | 120268 |
| Current liabilities (I) | 875 |
| Total Liabilities (J) | 875 |
| Total Equities (K) | 119393 |
| Debt ratio (J/H)*100 | 0.7% |
| Equity ratio (K/H)*100 | 99.3% |
4.
Concept Introduction:
Financial ratios: Ratio helps investor and the company to analyze the growth of the business. It helps to take decisions to management of business and helps investor in taking the decision of investment. Financial ratio also helps to compare the company with previous data and from other companies.
To Calculate:
Percent of current assets and long term assets.
4.
Answer to Problem 13SP
| Current assets percentage (G/H)*100 | 79.5% |
| Long term assets percentage (N/H)*100 | 20.5% |
Explanation of Solution
| Computer Services Revenue (A) | 25307 |
| Net Sales (B) | 18693 |
| Total Sales and revenue (C) | 44000 |
| Cost of goods sold (D) | 14052 |
| Net Income (E) | 18833 |
| Quick Assets (F) | 90924 |
| Current Assets (G) | 95568 |
| Total Assets (H) | 120268 |
| Current liabilities (I) | 875 |
| Total Liabilities (J) | 875 |
| Total Equities (K) | 119393 |
| Long term Assets (N)= H-G | 24700 |
| Current assets percentage (G/H)*100 | 79.5% |
| Long term assets percentage (N/H)*100 | 20.5% |
Want to see more full solutions like this?
Chapter 13 Solutions
Financial Accounting: Information for Decisions
- correct options is answer.arrow_forwardnone.arrow_forwardQuestion 3Footfall Manufacturing Ltd. reports the following financial information at the end of the current year: net sale $100 000 debtor's turnover ration (based on net sales) 2 inventory turnover ration 1.25 fixed assets turnover ratio 0.8 debt to assets ratio 0.6 net profit margin 5% gross profit margin 25% return on investment 2% Use the given information to fill out the templates for income statement and balance sheet given below: Income Statement of Footfall Manufacturing Ltd. for the year ending December 31, 20XX(in $) sales 100,000 cost of goods sold gross profit other expenses earnings before tax tax @50% earnings after tax Balance Sheet of Footfall Manufacturing Ltd. as at December 31, 20XX (in $) liabilities amount assets amount equity net fixed assets long term debt 50, 000 inventory short term debt debtors…arrow_forward
Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College
Financial AccountingAccountingISBN:9781337272124Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage LearningCentury 21 Accounting Multicolumn JournalAccountingISBN:9781337679503Author:GilbertsonPublisher:Cengage
Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage Learning