Horngren's Financial & Managerial Accounting, The Managerial Chapters (6th Edition)
6th Edition
ISBN: 9780134486857
Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura
Publisher: PEARSON
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Textbook Question
Chapter D, Problem 27AP
Comparative financial statement data of Sanfield, Inc. follow:
* Selected 2016 amounts
- 1. Market price of Sanfield’s common stock: $51.48 at December 31, 2018, and $37.08 at December 31, 2017.
- 2. Common shares outstanding: 16,000 on December 31, 2018 and 15,000 on December 31, 2017 and 2016.
- 3. All sales are on credit
Requirements
- 1. Compute the following ratios for 2018 and 2017:
- a.
Current ratio - b. Cash ratio
- c. Times-interest-earned ratio
- d. Inventory turnover
- e. Gross profit percentage
- f. Debt to equity ratio
- g.
Rate of return on common stockholders’ equity - h. Earnings per share of common stock
- i. Price/earnings ratio
- a.
- 2. Decide (a) whether Sanfield’s ability to pay debts and to sell inventory improved or deteriorated during 2018 and (b) whether the investment attractiveness of its common stock appears to have increased or decreased.
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Using ratios to evaluate a stock investment
Comparative financial statement data of Garfield Inc. follow:
Market price of Garfield’s common stock:$69.36 at December 31 2018 and $38.04 at December 31, 2017.
Common shares outstanding 14, 000 on December 31, 2018 and 12,000 on December 31 2017 and 2016.
All sales are on credit.
Requirements
Compute the following ratios tor 2018 and 2017:
a. current ratio
b. Cash ratio
c. Times-interest-earned ratio
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f. Debt to equity ratio
g. Rate of return on common stockholder’s equity
h. Earnings per share of common stock
i. Price/earnings ratio
2. Decide (a) whether Garfield’s ability to pat debts and to sell inventory improved or deteriorated during 2018 and (b) whether the investment attractiveness of its common stock appears to have increased or decreased.
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Selected balance sheet and income statement information for Humana Inc., a health and well-being company, follows.
2018
2017
Company
($ millions) Ticker Revenue income Assets Assets
Humana Inc HUM $66,832 $11,603 $35,333 $37,098
2018
Compute the following 2018 ratios for Humana.
a. Return on equity (ROE)
$
$
Note: 1. Select the appropriate numerator and denominator used to compute ROE from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute ROE.
Numerator
Denominator
0 $
$
2018
Net 2018 2017 Stockholders' Stockholders'
0 $
♦
0
b. Profit margin (PM)
Note: 1. Select the appropriate numerator and denominator used to compute PM from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute PM.
Numerator
Denominator
0 $
◆
Equity
$20,081
0
ROE
0
PM
c. Financial leverage (FL)
Note: 1. Select the appropriate numerator and denominator used to compute FL from the drop-down menu options. 2. Enter the…
Compute DuPont Analysis Ratios
Selected balance sheet and income statement information for Humana Inc., a health and well‑being company, follows.
2018
2017
2018
2018 Net
2018
2017
Stockholders’
Stockholders’
Company ($ millions)
Ticker
Revenue
income
Assets
Assets
Equity
Equity
Humana Inc
HUM
$66,610
$11,381
$35,111
$36,876
$19,859
$19,540
Compute the following 2018 ratios for Humana.
a. Return on equity (ROE)
Note: 1. Select the appropriate numerator and denominator used to compute ROE from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute ROE.
Numerator
Denominator
ROE
Answer
Answer
Answer
Answer
b. Profit margin (PM)
Note: 1. Select the appropriate numerator and denominator used to compute PM from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute PM.
Numerator
Denominator
PM
Answer
Answer
Answer
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c. Financial leverage…
Chapter D Solutions
Horngren's Financial & Managerial Accounting, The Managerial Chapters (6th Edition)
Ch. D - Prob. 1TICh. D - Prob. 2TICh. D - Prob. 3TICh. D - Prob. 4TICh. D - Prob. 5TICh. D - Prob. 6TICh. D - Prob. 7TICh. D - Prob. 8TICh. D - Prob. 9TICh. D - Prob. 10TI
Ch. D - Prob. 1QCCh. D - Prob. 2QCCh. D - Vertical analysis of Libertys balance sheet for...Ch. D - Prob. 4QCCh. D - Libertys inventory turnover during 2019 was...Ch. D - Prob. 6QCCh. D - Prob. 7QCCh. D - Prob. 8QCCh. D - Prob. 9QCCh. D - Prob. 10QCCh. D - Prob. 1RQCh. D - Prob. 2RQCh. D - Prob. 3RQCh. D - Prob. 4RQCh. D - Prob. 5RQCh. D - Prob. 6RQCh. D - Prob. 7RQCh. D - Prob. 8RQCh. D - Prob. 9RQCh. D - Prob. 10RQCh. D - Prob. 11RQCh. D - Prob. 12RQCh. D - Prob. 13RQCh. D - Prob. 1SECh. D - Verifine Corp. reported the following on its...Ch. D - Prob. 3SECh. D - Prob. 4SECh. D - Prob. 5SECh. D - Prob. 6SECh. D - Prob. 7SECh. D - Accels Companies, a home improvement store chain,...Ch. D - Prob. 9SECh. D - Prob. 10SECh. D - Prob. 11SECh. D - Prob. 12SECh. D - Prob. 13ECh. D - Prob. 14ECh. D - Prob. 15ECh. D - Refer to the data presented for Mulberry Designs,...Ch. D - Prob. 17ECh. D - Prob. 18ECh. D - Prob. 19ECh. D - Micatin, Inc.s comparative income statement...Ch. D - Prob. 21ECh. D - Prob. 22ECh. D - Prob. 23APCh. D - Prob. 24APCh. D - Prob. 25APCh. D - Prob. 26APCh. D - Comparative financial statement data of Sanfield,...Ch. D - Prob. 28APCh. D - Prob. 29APCh. D - Prob. 30BPCh. D - Prob. 31BPCh. D - Prob. 32BPCh. D - Prob. 33BPCh. D - Prob. 34BPCh. D - Prob. 35BPCh. D - In its annual report, XYZ Athletic Supply, Inc....Ch. D - Prob. 38PCh. D - Lance Berkman is the controller of Saturn, a dance...Ch. D - Prob. 1EICh. D - Prob. 1FSC
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