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
expand_more
expand_more
format_list_bulleted
Question
Chapter D, Problem 31BP
1.
To determine
Prepare a common-size income statement and
2.
To determine
Compare the company’s profit percentage and financial position with the average for the industry.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Specialty Department Stores chief executive officer (CEO) has asked you to compare the company's profit performance and financial position with the
average for the industry. The CEO has given you the company's income statement and balance sheet, as well as the industry average data for retailers. Assets
\table[[Current assets, %,.71.1%
Indicate in the following chart the most likely source of information for each business decision. Use M for managerial accounting information and F for financial accounting information. Business Decision 1. Determine whether to lend to a company 2. Evaluate a purchasing department’s performance 3. Report financial performance to board of directors . 4. Estimate product cost for a new line of shoes 5. Plan the budget for next quarter . 6. Measure profitability of an individual store 7. Prepare financial reports according to GAAP . 8. Determine location and size for a new plant
Performing vertical analysis
The Randall Department Stores, Inc. chief executive officer (CEO) has asked you to compare the company’s profit performance and financial position with the averages for the industry. The CEO has given you the company’s income statement and sheet as well as the industry average data for retailers.
Requirements
Prepare a vertical analysis for Randall for both its income statement and balance sheet.
2 Compare the company’s profit performance and financial position with the average for the industry.
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
Knowledge Booster
Similar questions
- Use the following information to answer the questions that follow. A. Calculate the operating income percentage for each of the stores. Comment on how your analysis has changed for each store. B. Perform a vertical analysis for each store. Based on your analysis, what accounts would you want to investigate further? How might management utilize this information? C. Which method of analysis (using a dollar value or percentage) is most relevant and/or useful? Explain.arrow_forwardYour Task… Using your assigned financial statements calculate the required ratios below Indicate if the change from year to year is favorable or unfavorable. All values should be accurate to at least two decimal places. The expectation is to submit a professional report free of grammar and spelling errors and easy to read. Think of this as a menu you would be handing to a customer. All calculations are to be represented. Analysis of Profitability Gross Profit Ratio Operating Profit Ratio Net Profit Ratio Sales to Total Assets Ratio Return on Total Assets Return on Equity Earnings Per Sharearrow_forward- Please refer to the following Income Statement and Balance Sheet (see attached picture): Prepare a vertical analysis for both the income statement and balance sheet. Write a paragraph comparing the company’s performance with the industry average. Compute the following ratios and comment on what the results mean when evaluating the company: Current ratio Gross profit percentage ratio Debt ratio Profit margin ratioarrow_forward
- Performing vertical analysis The Klein Department Stores, Inc. chief executive officer (CEO) has asked you to compare the company’s profit performance and financial position with the averages for the industry. The CEO has given you the company’s income statement and balance sheet as well as the industry average data for retailers. Requirements Prepare a vertical analysis for Klein for both its income statement and balance sheet. Compare the company’s profit performance and financial position with the average for the industry.arrow_forwardWhich Income Statement Format Do I Choose? You are an accountant for a small retail store and are tasked with determining the best presentation for your income statement. You may choose to present it in a multi-step format or a simple income statement format. The information on the statement will be used by investors, lenders, and management to make financial decisions related to your company. It is important to the store owners that you give enough information to assist management with decision-making, but not too much information to possibly deter investors or lenders. Which statement format do you choose? Why did you choose this format? What are the benefits and challenges of your statement choice for each stakeholder group?arrow_forwardHow you can assess the company’s performance with financial ratios? Select any company and analyzes the current situation of financial statements with the help of rations.arrow_forward
- Using the information provided below from Ben Company prepare two income statements: A normal GAAP Income Statement A CVP Income Statement These Income Statements should be done in good form and in Excel. Include formulas.arrow_forwardYou are a financial consultant. You are hired by a manufacturing company to assess its performance Based on financial ratios. Your task is to come up with the following: (1) financial analysis using financial ratios on liquidity, solvency or stability, and profitability; (2) trend analysis, both vertical and horizontal; and (3) comparative financial statements. The analysis should be benchmarked with competitors. Prepare a report indicating your comments on the financial health and performance of the company (as benchmarked with competitors) using the following liquidity ratios: (1) current ratio, (2) receivable turnover, (3) inventory turnover, and (4) quick ratio. Give your insights into the relative solvency or stability of the company (as benchmarked with the competitors) using the following ratios: (1) debt ratio, (2) times interest earned ratio, and (3) debt - equity ratio, Also, assess the relative profitability of the company (as benchmarked with competitors) using the…arrow_forwardClassify each of the following data as one of the three data types (categorical, ordinal, or quantitative.) Data Data type a. Customer name b. Customer satisfaction ranking c. Department d. Interest revenue e. Inventory cost f. Letter grades for coursework g. Number of units sold h. Political orientation (left, center, right) i. Product description j. Sales revenue k. Salesperson name l. Socioeconomic statusarrow_forward
- You are a financial consultant. You are hired by a manufacturing company to assess its performance Based on financial ratios. Your task is to come up with the following: (1) financial analysis using financial ratios on liquidity, solvency or stability, and profitability; (2) trend analysis, both vertical and horizontal; and (3) comparative financial statements. The analysis should be benchmarked with competitors. Frepare a report indicating your comments on the financial health and performance of the company turenchmarked with competitors) using the following liquidity ratios: (1) current ratio, (2) receivable turnover, (3) inventory turnover, and (4) quick ratio. competitors) using the following ratios: (1) debt ratio, (2) times interest earned ratio, and (3) debt- equity ratio. Give your insights into the relative solvency or stability of the company (as benchmarked with the Also, assess the relative profitability of the company (as benchmarked with competitors) using the following…arrow_forward1. Ratio analysis A company reports accounting data in its financial statements. This data is used for financial analyses that provide insights into a company's strengths, weaknesses, performance in specific areas, and trends in performance. These analyses are often used to compare a company's performance to that of its competitors or to its past or expected future performance. Such insight helps managers and analysts improve their decision making. Consider the following scenario: You work for a brokerage firm. Your boss asked you to analyze Blue Parrot Manufacturing's performance for the past three years and to write a report that includes a benchmarking of the company's performance. Which of the following components would be best for you to include in your financial statement analysis? A critique of the company's financial statements and a report of any misprints to be sent to the Securities and Exchange Commission A calculation of financial ratios and an evaluation of the…arrow_forwardHere you will find some income statements and balance sheets for Sears Holdings (SHLD) and Taget Corp (TGT). Assume that you are a financial manager at Sear and want to compare your firm’s situation with that of Target. Calculate represenatative ratios for liquidity, asset management efficiency, financial leverage (capital structure), and profitability for both Sears and Target. How would you summarize the financial performance of Sears compared to target (its benchmark firm)? Include Sears and Targets current ratio, acid-test ratio, average collection period, accounts receivable turnover, inventory turnover, debt ratio, timed interest earned, total asset turnover, fixed asset turnover, gross profit margin, operating profit margin, net profit margin, operating return on assets, and return on equity.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Financial Reporting, Financial Statement Analysis...FinanceISBN:9781285190907Author:James M. Wahlen, Stephen P. Baginski, Mark BradshawPublisher:Cengage Learning
Survey of Accounting (Accounting I)AccountingISBN:9781305961883Author:Carl WarrenPublisher:Cengage Learning
Century 21 Accounting Multicolumn JournalAccountingISBN:9781337679503Author:GilbertsonPublisher:Cengage- Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax CollegePrinciples of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax College
Financial Reporting, Financial Statement Analysis...
Finance
ISBN:9781285190907
Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:Cengage Learning
Survey of Accounting (Accounting I)
Accounting
ISBN:9781305961883
Author:Carl Warren
Publisher:Cengage Learning
Century 21 Accounting Multicolumn Journal
Accounting
ISBN:9781337679503
Author:Gilbertson
Publisher:Cengage
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College
Principles of Accounting Volume 2
Accounting
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax College