Loose Leaf for Foundations of Financial Management Format: Loose-leaf
17th Edition
ISBN: 9781260464924
Author: BLOCK
Publisher: Mcgraw Hill Publishers
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Chapter 3, Problem 22P
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The balance sheet for Revolution Clothiers is shown below. Sales for the year were $3,190,000, with 75 percent of sales sold on credit.
REVOLUTION CLOTHIERS
Balance Sheet 20X1
Assets
Cash
Accounts receivable
Inventory
Plant and equipment
Total assets
$ 24,000
283,000
266,000
450,000
a. Current ratio
b. Quick ratio
c. Debt-to-total-assets ratio
d. Asset turnover
e. Average collection period
$ 1,023,000
Accounts payable
Accrued taxes
Liabilities and Equity
times
times
%
times
days
Bonds payable (long-term)
Common stock
Paid-in capital
Retained earnings
Total liabilities and equity
Compute the following ratios:
Note: Use a 360-day year. Do not round intermediate calculations. Round your answers to 2 decimal places. Input your debt-to-
total assets answer as a percent rounded to 2 decimal places.
$ 279,000
107,000
130,000
100,000
150,000
257,000
$ 1,023,000
Consider the following company’s balance sheet and income statement.
For this company, calculate the following:
Current ratio.
Number of days’ sales in receivables.
Sales to total assets.
The following ratios have been computed for Pina Colada Company for 2010.
Profit margin 20% (net profit/revenue)
Times interest earned 15 times (income before interest expense and income taxes/interest expense)
Receivables turnover 5 times (net credit sales/average net receivables)
Acid-test ratio 1.60 : 1 (marketable net cash + securities + receivables/current liabilities)
Current ratio 3 : 1 (current assets/current liabilities)
Debt to total assets ratio 26% (total debts/total assets)
Pina Colada Company’s 2010 financial statements with missing information follow:
PINA COLADA COMPANY
Comparative Balance Sheet
December 31,
Assets 2010 2009
Cash P 25,000 P 35,000
Short-term Investments 15,000 15,000
Accounts receivable (net) ? (6)…
Chapter 3 Solutions
Loose Leaf for Foundations of Financial Management Format: Loose-leaf
Ch. 3 - If we divide users of ratios into short-term...Ch. 3 - Explain how the Du Pont system of analysis breaks...Ch. 3 - If the accounts receivable turnover ratio is...Ch. 3 - Prob. 4DQCh. 3 - Is there any validity in rule-of-thumb ratios for...Ch. 3 - Why is trend analysis helpful in analyzing ratios?...Ch. 3 - Inflation can have significant effects on income...Ch. 3 - What effect will disinflation following a highly...Ch. 3 - Why might disinflation prove favorable to...Ch. 3 - Comparisons of income can be very difficult for...
Ch. 3 - Low Carb Diet Supplement Inc. has two divisions....Ch. 3 - Database Systems is considering expansion into a...Ch. 3 - Prob. 3PCh. 3 - Prob. 4PCh. 3 - Prob. 5PCh. 3 - Dr. Zhivà€go Diagnostics Corp.’s income...Ch. 3 - The Haines Corp. shows the following financial...Ch. 3 - Easter Egg and Poultry Company has $2,000,000 in...Ch. 3 - Prob. 9PCh. 3 - Prob. 10PCh. 3 - Baker Oats had an asset turnover of 1.6 times per...Ch. 3 - AllState Trucking Co. has the following ratios...Ch. 3 - Front Beam Lighting Company has the following...Ch. 3 - Prob. 14PCh. 3 - Prob. 15PCh. 3 - Jerry Rice and Grain Stores has $4,780,000 in...Ch. 3 - Prob. 17PCh. 3 - Prob. 18PCh. 3 - Prob. 19PCh. 3 - Prob. 20PCh. 3 - Jim Short’s Company makes clothing for schools....Ch. 3 - The balance sheet for Stud Clothiers is shown...Ch. 3 - The Lancaster Corporation’s income statement is...Ch. 3 - Prob. 24PCh. 3 - Prob. 25PCh. 3 - Prob. 26PCh. 3 - Prob. 27PCh. 3 - Prob. 28PCh. 3 - The Global Products Corporation has three...Ch. 3 - Prob. 30PCh. 3 - Prob. 31PCh. 3 - Prob. 32PCh. 3 - Prob. 33PCh. 3 - Prob. 34PCh. 3 - The following information is from Harrelson...Ch. 3 - Using the financial statements for the Snider...Ch. 3 - Given the financial statements for Jones...Ch. 3 - Prob. 2WE
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