1
Cash flow statement
It is a statement that shows all the outflows incurred by a company in cash and all the inflows of cash. This statement is divided into three sections or it shows
2
To calculate:Amount of free cash flow.
3
To calculate:Current ratio and quick (acid-test) ratio for the company.
4
Asset management
Asset management means proper management of investments made by a company. Asset management is done to maximize the
To calculate:Average collection and average sales period in order to assist the asset management of the company.
5
Debt management Debt management means proper management of the amount that a company owes to others. It specifies the total amount that a company owes to its creditors.
To calculate:Debt to equity ratio and equity multiplier in order to assist the debt management of the company.
6
Profitability ratios These ratios calculate the ability of a company to make a profit related to its total assets, liabilities, expenses and sales made.
To calculate:Net profit margin and return on equity of the company in order to asses its profitability.
7
Assessment of market performance This requires the calculation of overall performance of the company in the market, earnings earned by the company, amount of dividend paid, etc.
To calculate:Earning per share and dividend payout ratio of the company in order to assess its market performance.
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Chapter IE Solutions
INTRO MGRL ACCT LL W CONNECT
- What will be the firm's cash cycle?arrow_forwardSummit Corporation started the year with total assets of $600,000 and total liabilities of $420,000. During the year, the business recorded $1,200,000 in revenues, $750,000 in expenses, and dividends of $80,000. Calculate the company's net income.arrow_forwardI need Answerarrow_forward
- Larson Industries has sales of $75,000, a beginning inventory of $8,000, purchases of $40,000, and an ending inventory of $5,000. What is the cost of goods sold (COGS)? (a) $43,000 (b) $35,000 (c) $40,000 (d) $45,000arrow_forwardmanagerial accountingarrow_forwardWhat is the cost of goods sold?arrow_forward
- Summit Electronics manufactures a single product. The company has provided the following data for its most recent month of operations: Number of units produced: 3,800 Variable costs per unit: • Direct materials: $95 Direct labor: $100 • Variable manufacturing overhead: $4 . Variable selling and administrative expense: $10 Fixed costs: • Fixed manufacturing overhead: $152,000 Fixed selling and administrative expense: $290,000 There were no beginning or ending inventories. Compute the absorption costing unit product cost.arrow_forwardThe net profit of a company for a year on a variable costing basis is $92,000. On an absorption costing basis, the net profit is $78,800. Fixed manufacturing overhead unit were the same in both the prior costs per and current year (i.e. $1.10 per unit). What was the change in inventory over the year?arrow_forwardGlorious Drinks Co. began the year with net fixed assets of $25,000 and had $27,200 in the account at the end of the year. During the year, the company paid $5,500 in interest and expensed $4,000 in depreciation. The company purchased $10,500 in fixed assets during the year. How many fixed assets did the company sell during the year?arrow_forward
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