Intermediate Accounting (2nd Edition)
2nd Edition
ISBN: 9780134730370
Author: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
Publisher: PEARSON
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Chapter 15, Problem 15.4E
To determine
To prepare:
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Find online the annual 10-K report for Costco Wholesale Corporation (COST) as of August 30, 2020.
a. Compute Costco's net profit margin, total asset turnover, and equity multiplier.
b. Verify the DuPont Identity for Costco's ROE.
c. Repeat the analysis from parts (a) and (b) using Walmart Stores (WMT) instead. Specifically, use Walmart's data as of January 31, 2020. Based on the DuPont Identity, what explains the difference between the two firms' ROE?
a. Compute Costco's net profit margin, total asset turnover, and equity multiplier.
The net profit margin is%. (Round to two decimal places.)
(Round to two decimal places.)
The total asset turnover is
The total asset turnover is
The equity multiplier is
b. Verify the DuPont Identity for Costco's ROE.
The ROE is%. (Round to two decimal places.)
c. Repeat the analysis from parts (a) and (b) using Walmart Stores (WMT) instead. Specifically, use Walmart's data as of January 31, 2020.
The net profit margin is%. (Round to two decimal places.)…
You have been hired as an analyst for MBJ & Co and your team is working on an independent assessment of Anak Bumi Sdn. Bhd (ABSB). ABSB is a company that specializes in the plantation. Your assistant has provided you with the following data for ABSB and their industry.
Ratio
2019
2020
2021
2020-
Industry Average
Long-term debt
0.45
0.40
0.35
0.35
Inventory Turnover
62.65
42.42
32.25
53.25
Depreciation/Total Assets
0.25
0.02
0.02
0.02
Days’ sales in receivables
113
98
94
130
Debt to Equity
0.75
0.85
0.90
0.88
Profit Margin
0.08
0.07
0.06
0.08
Total Asset Turnover
0.54
0.65
0.70
0.40
Quick Ratio
1.03
1.03
1.03
1.03
Current Ratio
1.33
1.21
1.15
1.25
Times Interest Earned
0.90
4.38
4.45
4.65
Equity Multiplier
1.75
1.85
1.90
1.88
Required:
You are required to prepare interim audit report of ABSB for the year 2020.
Analyze and compare Amazon.com to Best Buy
Amazon.com, Inc. (AMZN) is one of the largest Internet retailers in the world. Best Buy, Co. Inc. (BBY) is a leading retailer of consumer electronics and media products in the United States. Amazon and Best Buy compete in similar markets; however, Best Buy sells through both traditional retail stores and the Internet, while Amazon sells only through the Internet. Current asset and current liability information from recent financial statements are as follows (in millions):
Amazon
Best Buy
Current assets:
Cash
$19,334
$ 1,976
Short-term investments
6,647
1,305
Accounts receivable
8,339
1,162
Inventories
11,461
5,051
Other current assets
-
392
Total current assets
$45,781
$ 9,886
Current liabilities:
Accounts payable
$25,309
$ 4,450
Other current liabilities
18,507
2,475
Total current liabilities
$43,816
$ 6,925
Chapter 15 Solutions
Intermediate Accounting (2nd Edition)
Ch. 15 - Prob. 15.1QCh. 15 - What are the retained earnings of a firm?Ch. 15 - Prob. 15.3QCh. 15 - Prob. 15.4QCh. 15 - Does an entity have to legally dissolve treasury...Ch. 15 - Prob. 15.6QCh. 15 - Prob. 15.7QCh. 15 - Prob. 15.8QCh. 15 - Prob. 15.9QCh. 15 - Prob. 15.10Q
Ch. 15 - Prob. 15.11QCh. 15 - Do firms often use stock dividends to avoid...Ch. 15 - Prob. 15.13QCh. 15 - What is included in other comprehensive income?Ch. 15 - Is a specific format required for reporting...Ch. 15 - Prob. 15.16QCh. 15 - Boone Corporations outstanding capital stock on...Ch. 15 - Prob. 15.2MCCh. 15 - Prob. 15.3MCCh. 15 - Prob. 15.4MCCh. 15 - Prob. 15.5MCCh. 15 - Prob. 15.6MCCh. 15 - Prob. 15.7MCCh. 15 - Prob. 15.1BECh. 15 - Stockholders Equity Terminology, U.S. GAAP, IFRS....Ch. 15 - Common Stock Issuance, No Par Value. Perdido...Ch. 15 - Prob. 15.4BECh. 15 - Prob. 15.5BECh. 15 - Prob. 15.6BECh. 15 - Prob. 15.7BECh. 15 - Prob. 15.8BECh. 15 - Treasury Stock Transactions. Ginger Spice...Ch. 15 - Treasury Stock Transactions. On March 15, Chief...Ch. 15 - Treasury Stock Transactions, Retirement. Using the...Ch. 15 - Prob. 15.12BECh. 15 - Prob. 15.13BECh. 15 - Prob. 15.14BECh. 15 - Common Stock Issuance, Stated Value, Issue Costs....Ch. 15 - Common Stock Issuance. Par Value, Issue Costs,...Ch. 15 - Prob. 15.3ECh. 15 - Prob. 15.4ECh. 15 - Prob. 15.5ECh. 15 - Treasury Stock Transactions, Retirement,...Ch. 15 - Treasury Stock Transactions, Disclosure. The...Ch. 15 - Treasury Stock Transactions. Several years ago,...Ch. 15 - Prob. 15.9ECh. 15 - Prob. 15.10ECh. 15 - Prob. 15.11ECh. 15 - Prob. 15.12ECh. 15 - Preferred Stock Issuance Dividends, Disclosure....Ch. 15 - Prob. 15.14ECh. 15 - Prob. 15.15ECh. 15 - Prob. 15.16ECh. 15 - Prob. 15.17ECh. 15 - Prob. 15.18ECh. 15 - Prob. 15.19ECh. 15 - Prob. 15.20ECh. 15 - Prob. 15.21ECh. 15 - Prob. 15.22ECh. 15 - Prob. 15.1PCh. 15 - Prob. 15.2PCh. 15 - Prob. 15.3PCh. 15 - Prob. 15.4PCh. 15 - Prob. 15.5PCh. 15 - Common Stock Issuance, Treasury Stock, Dividends,...Ch. 15 - Prob. 15.7PCh. 15 - Prob. 15.8PCh. 15 - Prob. 15.9PCh. 15 - Prob. 1JCCh. 15 - Judgment Case 2: Impact of Judgment in Accounting...Ch. 15 - Surfing the Standards Cases Surfing the Standards...Ch. 15 - Prob. 1BCCCh. 15 - Prob. 2BCC
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