Financial Reporting, Financial Statement Analysis and Valuation
8th Edition
ISBN: 9781285190907
Author: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher: Cengage Learning
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Rotorua Products sells agricultural products in the burgeoning Asian market. The company's current assets, current liabilities, and sales
over the last five years (Year 5 is the most recent year) are as follows:
Sales
Cash
Accounts receivable, net
Inventory
Total current assets
Current liabilities
Sales
Current assets:
Cash
Accounts receivable, net
Inventory
Total current assets
Current liabilities
Year 11
Year 2
Year 3
Year 4
Year 5
$4,545,400 $4,737,850 $ 5,126,380 $5,421,900 $5,776,190
Year 1
$ 88,854
418,283
800,380
$ 1,307,517
$ 313,578
Required:
1. Express all of the asset, liability, and sales data in trend percentages. Use Year 1 as the base year.
Note: Round your percentage answers to 1 decimal place (i.e., 0.1234 should be entered as 12.3).
%
%
%
%
%
%
Year 2
$ 88,845
$ 77,057
435,833
587,279
$ 90,380
417,076
876,061
$1,383,517 $ 1,350,248 $ 1,466,414 $1,552,502
$ 346,822 $ 336,685 $ 335,107 $ 390,612
825,570
882,078
%
%
%
%
%
%
Year 3
%
%
%
%
Year 4
%
%
$ 80,928
569,984…
Ralph Lauren Corporation sells apparel through company-owned retail stores. Recent financial information for Ralph Lauren follows (in thousands):
Please see the attachment for details:
Assume that the apparel industry average return on total assets is 8.0% and the average return on stockholders’ equity is 10.0% for the year ended April 2, Year 3.a. Determine the return on total assets for Ralph Lauren for fiscal Years 2 and 3. Round percentages to one decimal place.b. Determine the return on stockholders’ equity for Ralph Lauren for fiscal Years 2 and 3. Round percentages to one decimal place.c. Evaluate the two-year trend for the profitability ratios determined in (a) and (b).d. Evaluate Ralph Lauren’s profit performance relative to the industry.
The Gap Inc. (GPS) operates specialty retail stores under such brand
names as GAP, Old Navy, and Banana Republic. The following asset and
liability data (in millions) were adapted from recent financial statements.
Year 2 Year 1
Current assets:
Cash
$1,515 $1,510
Accounts receivable
275
462
Inventory
1,889
1,928
Prepaid and other current assets
638
530
Total current assets
$4,317 $4,430
Total current liabilities
$2,234 $2,342
1. Compute quick assets for Years 2 and 1.
Quick Assets
Chapter 4 Solutions
Financial Reporting, Financial Statement Analysis and Valuation
Ch. 4 - Common-Size Analysis. Common-size analysis is a...Ch. 4 - Earnings per Share. Firm A reports an increase in...Ch. 4 - Prob. 3QECh. 4 - Profit Margin for ROA versus ROCE. Describe the...Ch. 4 - Concept and Measurement of Financial Leverage....Ch. 4 - Advantages of Financial Leverage. A company...Ch. 4 - Prob. 7QECh. 4 - Nucor, a steel manufacturer, reported net income...Ch. 4 - Phillips-Van Heusen, an apparel manufacturer,...Ch. 4 - TJX, Inc., an apparel retailer, reported net...
Ch. 4 - Boston Scientific, a medical device manufacturer,...Ch. 4 - Valero Energy, a petroleum company, reported net...Ch. 4 - Exhibit 4.22 presents selected operating data for...Ch. 4 - Microsoft Corporation (Microsoft) and Oracle...Ch. 4 - Prob. 17PCCh. 4 - Prob. 18PCCh. 4 - Texas Instruments (TI) designs and manufactures...Ch. 4 - JCPenney operates a chain of retail department...Ch. 4 - Prob. 21PCCh. 4 - Selected data for General Mills for 2007, 2008,...Ch. 4 - Prob. 23PCCh. 4 - Hasbro is a leading firm in the toy, game, and...Ch. 4 - Fitch sells casual apparel and personal care...Ch. 4 - Prob. 26PCCh. 4 - Starwood Hotels (Starwood) owns and operates many...Ch. 4 - Select data for Avis and Hertz for 2012 follow....Ch. 4 - Integrative Case 1.1 introduced the industry...Ch. 4 - Prob. 1ABICCh. 4 - Prob. 1ACICCh. 4 - Prob. 1BAICCh. 4 - Prob. 1BBICCh. 4 - Walmart and Carrefour follow similar strategies....Ch. 4 - Walmart and Carrefour follow similar strategies....
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- The Gap Inc. (GPS) operates specialty retail stores under such brand names as GAP, Old Navy, and Banana Republic. The following asset and liability data (in millions) were adapted from recent financial statements. Year 2 Year 1 Current assets: Cash $1,515 $1,510 Accounts receivable 275 462 Inventory 1,889 1,928 Prepaid and other current assets 638 530 Total current assets $4,317 $4,430 Total current liabilities $2,234 $2,342 1. Compute quick assets for Years 2 and 1. 2. Compute the quick ratio for Years 2 and 1. 3. The Gap’s quick assets have _______ from Year 1 to Year 2. Its quick ratio ______ from fill ______ in Year 1 to ______ in Year 2. Overall, The Gap’s liquidity position has _______ from Year 1 to Year 2.arrow_forwardRotorua Products, Limited, of New Zealand markets agricultural products for the burgeoning Asian consumer market. The company's current assets, current liabilities, and sales over the last five years (Year 5 is the most recent year) are as follows: Sales Cash Accounts receivable, net Inventory Total current assets Current liabilities Sales Current assets: Cash Accounts receivable, net Inventory Total current assets Current liabilities Year 1 $4,593,830 $ 87,529 404,278 801,291 $ 1,293,098 $ 304,544 Year 1 Year 2 $4,780,780 $93,256 426,549 868,050 $ 1,387,855 $ 338,428 % % % % % % % % % % Year 3 $4,986,700 Required: 1. Express all of the asset, liability, and sales data in trend percentages. Use Year 1 as the base year. (Round your percentage answers to 1 decimal place (i.e., 0.1234 should be entered as 12.3).) ered as 12 Year 2 Year 3 $ 86,310 433,877 819,354 $ 1,339,541 $ 334,294 % % % % Year 4 $ 5,563,020 Year 4 $ 77,754 496,981 899,709 $1,474,444 $ 322,187 % % % % Year 5 $ 5,640,450…arrow_forwardRotorua Products, Limited, of New Zealand markets agricultural products for the burgeoning Asian consumer market. The company's current assets, current liabilities, and sales over the last five years (Year 5 is the most recent year) are as follows: Sales Cash Accounts receivable, net Inventory Total current assets Current liabilities Sales Current assets: Cash Accounts receivable, net Inventory Total current assets Current liabilities Year 1 Year 2 $ 4,654,890 $ 98,625 412,539 812,564 $ 4,785,720 $ 91,603 423,536 876,894 $ 1,323,728 $ 1,392,033 $ 339,515 $ 300,175 Required: 1. Express all of the asset, liability, and sales data in trend percentages. Use Year 1 as the base year. (Round your percentage answers to 1 decimal place (i.e., 0.1234 should be entered as 12.3).) Year 1 % % % % % % Year 2 % % % % % % Year 3. Year 4 Year 5. $ 5,597,560 $ 5,808,960 $ 4,989,130 $ 103,392 439,311 817,070 $ 1,359,773 $ 1,467,996 $ 1,554,121 $333,288 $ 328,594 $ 409,089 $ 74,976 501,957 891,063 $…arrow_forward
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