Bundle: Accounting, Loose-Leaf Version, 26th + LMS Integrated for CengageNOW, 2 terms Printed Access Card
26th Edition
ISBN: 9781305715967
Author: Carl Warren, Jim Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Chapter 4, Problem 4.6APE
(a)
To determine
Ratio analysis
It is the financial analysis tool for measuring the profitability, liquidity, capability and overall performance of a company.
Following are the two measures of liquidity:
- 1.
Current ratio : Current ratio is used to determine the relationship between current assets and current liabilities. The ideal current ratio is 2:1. The following formula is used to calculate current ratio. - 2.
Working capital : Total current assets minus total current liabilities are the working capital of a company.
The working capital and current ratio for 2016 and 2015.
(b)
To determine
To Indicate: The change in current ratio form 2015 to 2016.
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8. Trend Ratios, Application of some Financial Ratios and their Interpretation
Some of the balance sheet and income statement figures of Sapphire Mfg. CO. for 2016, 2017 and 20181 are as
follows.
2018
P30,000
2016
2017
Quick assets
P40,000
P48,000
65,000
25,000
80,000
50,000
Current assets
50,000
40,000
110,000
200,000
Investments
160,000
135,000
Plants, property and equipment, net
Total assets
250,000
265,000
Current liabilities
45,000
50,000
100,000
75,000
Long Term debt
Total stockholders' equity
40,000
50,000
105,000
125,000
125,000
Total liabilities and stockholders'
Equity
200,000
400,000
240,000
250,000
265,000
Sales
375,000
500,000
Cost of goods sold
Operating expenses (including
Depreciation of P10,000)
255,000
290,000
110,000
95,000
105,000
Net income
50,000
50,000
130,000
a) Compute for the trend ratios based on the above given data and give your interpretation of the 2017 and 2018
figures.
Using the financial statements in the image, calculate the following ratios for both the FY 2017 and FY 2018:
Current Ratio
Quick Ratio
Total Asset Turnover
Average Collection
Total Debt to Total Assets
Times Interest Earned
Net Profit Margin
Return on Assets
Return on Equity
Modified Du Point Equation for FY 2018
PE Ratio
Market to Book Ratio
Using the financial statements in the image, calculate the following ratios for both the FY 2017 and FY 2018:
Current Ratio
Quick Ratio
Total Asset Turnover
Average Collection
Total Debt to Total Assets
Times Interest Earned
Net Profit Margin
Return on Assets
Return on Equity
Modified Du Point Equation for FY 2018
PE Ratio
Market to Book Ratio
Chapter 4 Solutions
Bundle: Accounting, Loose-Leaf Version, 26th + LMS Integrated for CengageNOW, 2 terms Printed Access Card
Ch. 4 - Why do some accountants prepare an end-of-period...Ch. 4 - Describe the nature of the assets that compose the...Ch. 4 - Prob. 3DQCh. 4 - Prob. 4DQCh. 4 - Why are closing entries required at the end of an...Ch. 4 - What is the difference between adjusting entries...Ch. 4 - What is the purpose of the post-closing trial...Ch. 4 - Prob. 8DQCh. 4 - What is the natural business year?Ch. 4 - Prob. 10DQ
Ch. 4 - Prob. 4.1APECh. 4 - Flow of accounts into financial statements The...Ch. 4 - Statement of owner's equity Marcie Davies owns and...Ch. 4 - Statement of owners equity Blake Knudson owns and...Ch. 4 - Classified balance sheet The following accounts...Ch. 4 - Prob. 4.3BPECh. 4 - Closing entries After the accounts have been...Ch. 4 - Closing entries After the accounts have been...Ch. 4 - Accounting cycle From the following list of steps...Ch. 4 - Accounting cycle From the following list of steps...Ch. 4 - Prob. 4.6APECh. 4 - Prob. 4.6BPECh. 4 - Flow of accounts into financial statements The...Ch. 4 - Prob. 4.2EXCh. 4 - Financial statements from the end-of-period...Ch. 4 - Financial statements from the end-of-period...Ch. 4 - Income statement The following account balances...Ch. 4 - Prob. 4.6EXCh. 4 - Prob. 4.7EXCh. 4 - Statement of owner's equity Apex Systems Co....Ch. 4 - Statement of owners equity; net loss Selected...Ch. 4 - Prob. 4.10EXCh. 4 - Balance sheet classification At the balance sheet...Ch. 4 - Balance sheet Optimum Weight Loss Co. offers...Ch. 4 - Prob. 4.13EXCh. 4 - Prob. 4.14EXCh. 4 - Closing entries Prior to its closing, Income...Ch. 4 - Closing entries with net income After all revenue...Ch. 4 - Closing entries with net loss Mira Services Co....Ch. 4 - Prob. 4.18EXCh. 4 - Prob. 4.19EXCh. 4 - Steps in the accounting cycle Rearrange the...Ch. 4 - Prob. 4.21EXCh. 4 - Prob. 4.22EXCh. 4 - Completing an end-of-period spreadsheet List (a)...Ch. 4 - Prob. 4.24EXCh. 4 - Prob. 4.25EXCh. 4 - Appendix Completing an end-of-period spreadsheet...Ch. 4 - Appendix Adjustment data on an end-of-period...Ch. 4 - Appendix Completing an end-of-period spreadsheet...Ch. 4 - Prob. 4.1APRCh. 4 - Financial statements and closing entries Finders...Ch. 4 - T accounts, adjusting entries, financial...Ch. 4 - Ledger accounts, adjusting entries, financial...Ch. 4 - Complete accounting cycle For the past several...Ch. 4 - Financial statements and closing entries Last...Ch. 4 - Financial statements and closing entries The...Ch. 4 - T accounts, adjusting entries, financial...Ch. 4 - Ledger accounts, adjusting entries, financial...Ch. 4 - Complete accounting cycle For the past several...Ch. 4 - The unadjusted trial balance of PS Music as of...Ch. 4 - Kelly Pitney began her consulting business, Kelly...Ch. 4 - Prob. 4.1CPCh. 4 - Financial statements The following is an excerpt...Ch. 4 - Financial statements Assume that you recently...
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