Class 16 Ratio Analysis Problem Set 3 Kroger and Sprouts Solution

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[The following information applies to the questions displayed below.] The Slumber Store (TSS) is a national wholesaler of beds, mattresses, pillows, and sheets. Key totals from TSS's most recent and forecasted financial statements are presented in the table below. From the income statement Sales Revenue Cost of Goods Sold Gross Profit From the balance sheet Inventories Last Year This Year Next Year $ 560,000 $ 615,000 346,500 405,250 213,500 209,750 $770,000 556,300 213,700 Last Year This Year Next Year $ 88,000 $ 101,808 $ 179,825 Required: 1. Use the financial statement totals to compute the company's actual inventory turnover ratio for this year and its forecasted inventory turnover ratio for next year. Also compute the days-to-sell for this year (actual) and next year (forecasted). Is inventory turnover expected to improve or worsen next year? 2. Use the financial statement totals to compute the company's actual gross profit percentage for this year and its forecasted gross profit…

Uma Foodstuff Ltd. is a large chain of food stores. The financial statements for Uma Ltd. are given below. Income statement for the year ended 31 December   2021 2020   $m. $m. Revenue 145,000 160,000 Cost of sales 86,000 91,200 Gross profit 59,000 68,800 Selling and distribution expenses 17,500 17,600 Administrative expenses 7,500 6,400 Operating profit 34,000 44,800 Interest expense 2,000 400 Profit before taxation 32,000 44,400 Income tax expense 6,400 8,880 Net profit 25,600 35,520     Statement of financial position as at 31 December   2021 2020   $m. $m. ASSETS     Non-current assets          Land and buildings 40,000 68,600      Equipment 34,000 35,000   74,000  103,600 Current assets          Inventories 20,000 12,000     Trade receivables 4,000 2,000      Cash 4,000 7,000…

Selected financial data of Target Corporation and Wal-Mart Stores, Inc. for a recent year are presented here (in millions).   Target Corporation Wal-Mart Stores, Inc. Income Statement Data for Year Net sales $61,471 $374,526 Cost of goods sold 41,895 286,515 Selling and administrative expenses 16,200 70,847 Interest expense 647 1,798 Other income (expense) 1,896 4,273 Income tax expense 1,776 6,908 Net income $2,849 $12,731 Balance Sheet Data (End of Year) Current assets $18,906 $47,585 Noncurrent assets 25,654 115,929 Total assets $44,560 $163,514 Current liabilities $11,782 $58,454 Long-term debt 17,471 40,452 Total stockholders' equity 15,307 64,608 Total liabilities and stockholders' equity $44,560 $163,514 Target Corporation Wal-Mart Stores, Inc. Beginning-of-Year Balances Total assets $37,349 $151,587 Total stockholders' equity 15,633 61,573 Current liabilities 11,117 52,148 Total liabilities 21,716 90,014 Other Data Average net accounts receivable $7,124 $3,247 Average inventory…

ces Bigco Corporation is one of the nation's leading distributors of food and related products to restaurants, universities, hotels, and other customers. A simplified version of its recent income statement contained the following items (in millions). Cost of sales Income taxes Interest expense Net earnings Sales Earnings before income taxes. Selling, general, and administration expense Other revenues Total expenses (excluding income taxes) Total revenues $ 11,671 389 34 1,147 16,270 1,536 3,463 434 BIGCO CORPORATION Income Statement 15,168 16,704 Prepare an income statement for the year ended June 30, current year. (Hint: First order the items as they would appear on the income statement and then confirm the values of the subtotals and totals.) Note: Enter your answers in millions rather than in dollars (for example, 5,000 million should be entered as 5,000 rather than 5,000,000).

Selected hypothetical financial data of Target and Wal-Mart for 2022 are presented here (in millions).     TargetCorporation   Wal-MartStores, Inc.     Income Statement Data for Year Net sales     $66,400     $414,000   Cost of goods sold     45,000     302,000   Selling and administrative expenses     15,500     81,000   Interest expense     650     1,900   Other income (expense)     (80 )   (400 ) Income tax expense     1,400     7,300   Net income     $ 3,770     $ 21,400                       Balance Sheet Data(End of Year) Current assets     $17,000     $47,000   Noncurrent assets     26,700     120,000   Total assets     $43,700     $167,000   Current liabilities     $11,000     $56,000   Long-term debt     16,800     45,000   Total stockholders’ equity     15,900     66,000   Total liabilities and stockholders’ equity     $43,700     $167,000…

Selected hypothetical financial data of Target and Wal-Mart for 2022 are presented here (in millions).     TargetCorporation   Wal-MartStores, Inc.     Income Statement Data for Year Net sales     $66,400     $414,000   Cost of goods sold     45,000     302,000   Selling and administrative expenses     15,500     81,000   Interest expense     650     1,900   Other income (expense)     (80 )   (400 ) Income tax expense     1,400     7,300   Net income     $ 3,770     $ 21,400                       Balance Sheet Data(End of Year) Current assets     $17,000     $47,000   Noncurrent assets     26,700     120,000   Total assets     $43,700     $167,000   Current liabilities     $11,000     $56,000   Long-term debt     16,800     45,000   Total stockholders’ equity     15,900     66,000   Total liabilities and stockholders’ equity     $43,700     $167,000…

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Wendy’s International, Inc., and McDonald’s Corporation, two leading fast-food chains, are classified in SIC code 5812—Eating Places. Recent results for each company, along with industry averages, follow.     Wendy’s   McDonald’s   Industry Average   Return on assets   7.7 %   9.9 %   6.4 %   Return on common stockholders’equity   11.9 %   17.7 %   14.0 %   Net income as a percentage of sales   7.4 %   12.7 %   2.9 %   Debt-to-equity ratio   0.67     0.98     1.04         How do Wendy’s and McDonald’s compare to the industry averages? Based on your analysis, would you consider these two companies to be industry leaders? Why or why not?         The industry data reported here represent Dun and Bradstreet’s industry median. Dun and Bradstreet also reports industry norms for the upper quartile (top 25%) of companies in the industry. In the top quartile, return on assets was 15.1%, return on common stockholders’ equity was 34.7%,…

The following table shows financial data (year 2004) for Costco Wholesale and Wal-Mart, two major U.S. retailers.       costco ($m)  walmart ($m) inventory               3,643.00            29,447.00 sales(net)            48,106.00          286,103.00 COGS            41,651.00          215,493.00   Assume that both companies have an average annual holding cost rate of 30 percent (i.e., it costs both retailers $3 to hold an item that they procured for $10 for one entire year). a. How many days, on average, does a product stay in Costco's inventory before it is sold? Assume that stores are operated 365 days a year. b. How much lower is, on average, the inventory cost for Costco compared to Wal-Mart of a household cleaner valued at $5 COGS? Assume that the unit cost of the household cleaner is the same for both companies and that the price and the inventory turns of an item are independent.

Suppose selected comparative statement data for the giant bookseller Barnes & Noble are as follows. All balance sheet data are as of the end of the fiscal year (in millions).     2022   2021 Net sales   $5,250.5   $5,600.7 Cost of goods sold   3,000.0   3,800.7 Net income   85.3   160.6 Accounts receivable   75.1   100.0 Inventory   1,250.1   1,350.1 Total assets   2,850.0   3,150.0 Total common stockholders’ equity   880.0   1,100.5 Compute the following ratios for 2022. (Round asset turnover to 2 decimal places, e.g 1.83 and all other answers to 1 decimal place, e.g. 1.8 or 2.5%) (a)   Profit margin   enter profit margin in percentages rounded to 1 decimal places  % (b)   Asset turnover   enter a number for asset turnover in times rounded to 2 decimal places  times (c)   Return on assets   enter return on assets in percentages rounded to 1 decimal place  % (d)   Return on common stockholders’ equity   enter…

Flair ranks the individual customers in the Ma and Pa single-store distribution market on the basis of monthly operating income. The cumulative operating income of the top 20% of customers is $58,120. Best Drugs reports operating losses of $23,670 for the bottom 40% of its customers. Make four recommendations that you think Best Drugs should consider in light of this new customer-profitability information.

Selected hypothetical financial data of Target and Wal-Mart for 2022 are presented here (in millions).     TargetCorporation   Wal-MartStores, Inc.     Income Statement Data for Year Net sales     $65,300     $417,000   Cost of goods sold     45,000     301,000   Selling and administrative expenses     14,000     79,000   Interest expense     660     1,800   Other income (expense)     (85 )   (380 ) Income tax expense     1,500     7,100   Net income     $ 4,055     $ 27,720                       Balance Sheet Data(End of Year) Current assets     $16,000     $50,000   Noncurrent assets     27,400     121,000   Total assets     $43,400     $171,000   Current liabilities     $11,000     $54,000   Long-term debt     17,800     43,000   Total stockholders’ equity     14,600     74,000   Total liabilities and stockholders’ equity     $43,400     $171,000…

Selected hypothetical comparative statement data for the giant bookseller Barnes & Noble are presented here. All balance sheet data are as of the end of the fiscal year (in millions).     2022   2021 Net sales   $5,050.3   $4,900.0 Cost of goods sold   3,300.3   4,201.1 Net income   65.1   100.0 Accounts receivable   75.1   102.2 Inventory   1,150.0   1,250.0 Total assets   2,850.0   3,150.0 Total common stockholders’ equity   900.2   1,140.9 Compute the following ratios for 2022. (Round asset turnover to 2 decimal places, e.g 1.83 and all other answers to 1 decimal place, e.g. 1.8 or 2.5%) (a)   Profit margin   enter profit margin in percentages rounded to 1 decimal place  % (b)   Asset turnover   enter asset turnover in times rounded to 2 decimal places  times (c)   Return on assets   enter return on assets in percentages rounded to 1 decimal place  % (d)   Return on common stockholders’ equity   enter return on common…

Selected hypothetical comparative statement data for the giant bookseller Barnes & Noble are presented here. All balance sheet data are as of the end of the fiscal year (in millions).     2022   2021 Net sales   $4,950.2   $5,700.8 Cost of goods sold   3,500.5   3,800.7 Net income   75.2   170.7 Accounts receivable   65.0   103.3 Inventory   1,150.0   1,350.1 Total assets   2,950.1   3,250.1 Total common stockholders’ equity   970.9   1,140.9 Compute the following ratios for 2022. (Round asset turnover to 2 decimal places, e.g 1.83 and all other answers to 1 decimal place, e.g. 1.8 or 2.5%) (a)   Profit margin   enter profit margin in percentages rounded to 1 decimal place  % (b)   Asset turnover   enter asset turnover in times rounded to 2 decimal places  times (c)   Return on assets   enter return on assets in percentages rounded to 1 decimal place  % (d)   Return on common stockholders’ equity   enter return on common…

The following information is taken from the financial statements of Down Home Deli for the last three years. The owner, John Walton is quite pleased to see that his sales are growing steadily. 2018 2017 2016 Sales $ 61,500 $ 50,400 $ 42,000 Cost of goods sold 27,670 21,170 16,800 Operating income 7,530 6,050 4,620 Net income 3,075 4,030 2,940 Instructions: (a) Calculate gross profit margin, profit margin, and profit margin using operating income. (b) Comment on whether the Deli is, in fact, doing better over the three years as John believes.

The following table shows income statement and balance sheet data for five U.S. industries in 2017.   INCOME STATEMENT AND BALANCE SHEET FOR 2017SELECTED U.S. INDUSTRIES FOR 2017(Figures in $ billions)   Food   Pharmaceuticals   Oiland Coal   Computers andPeripherals   FoodStores Income Statement Data:                                       Sales $ 666.9     $ 427.5     $ 802.0     $ 216.0     $ 474.2   Cost of goods sold   596.1       352.4       757.8       189.7       451.0   Balance Sheet Data:                                       Inventory $ 67.8     $ 56.8     $ 44.2     $ 11.3     $ 27.9   Accounts receivable   56.6       68.1       52.8       23.7       7.4   Accounts payable   49.0       42.3       50.3       39.5       23.7       Note: Cost of goods sold includes selling, general, and administrative expenses. Source: U.S. Department of Commerce, Quarterly Financial Report for Manufacturing, Mining, Trade Corporations, and Selected Service Industries,…

Suppose selected comparative statement data for the giant bookseller Barnes & Noble are as follows. All balance sheet data are as of the end of the fiscal year (in millions). Net sales Cost of goods sold Net income Accounts receivable Inventory Total assets Total common stockholders' equity 2022 $4,750.0 3.300.3 85.3 75.1 1,150.0 2,850.0 900.2 2021 $5,500.6 3,700.6 110.1 102.2 1.250.0 3,250.1 1.120.7

Here are comparative financial statement data for Oriole Company and Ivanhoe Company, two competitors. All data are as of December 31, 2027, and December 31, 2026. Oriole Company Ivanhoe Company 2027 2026 2027 2026 Net sales $1,774,000 $531,000 Cost of goods sold 961,508 298,953 Operating expenses 237,716 79,119 Interest expense 7,096 Income tax expense 62,090 3,717 29,736 Current assets 324,900 $314,400 82,400 $79,100 Plant assets (net) 523,200 510,000 139,000 127,800 Current liabilities 65.000 75,200 36,000 30,100 Long-term liabilities 116,200 89,000 29,300 25,500 Common stock, $10 par 491,000 491,000 121,000 121,000 Retained earnings 175,900 169.200 35,100 30,300 (a) Prepare 2027 income statements for both companies, then prepare a vertical analysis for each. (Round percentages to 1 decimal place, e.g. 2.5%.) (b1) Condensed Income Statement For the Year Ended December 31, 2027 Oriole Company Dollars $1,774,000 961,508 Ivanhoe Company Dollars Percent Percent % $531,000 % 298,953…

es Bigco Corporation is one of the nation's leading distributors of food and related products to restaurants, universities, hotels, and other customers. A simplified version of its recent income statement contained the following items (in millions). Cost of sales Income taxes Interest expense Net earnings Sales Earnings before income taxes Selling, general, and administration expense Other revenues Total expenses (excluding income taxes) Total revenues $ 11,631 319 34 1,193 16,240 1,512 3,493 430 15,158 16,670 Prepare an income statement for the year ended June 30, current year. (Hint: First order the items as they would appear on the income statement and then confirm the values of the subtotals and totals.) Note: Enter your answers in millions rather than in dollars (for example, 5,000 million should be entered as 5,000 rather than 5,000,000).

Please send answer in chart format Megamart, a retailer of consumer goods, provides the following information on two of its departments (each considered an investment center).  Investment Center Sales   Income   AverageInvested Assets Electronics $ 39,840,000   $ 2,988,000   $ 16,600,000   Sporting goods   25,200,000     2,142,000     12,600,000       Compute profit margin and investment turnover for each department. Which department generates the most net income per dollar of sales? Which department is most efficient at generating sales from average invested assets?

Landseeker's Restaurants reported cost of goods sold of $342 million and accounts payable of $64 million for 2020. In 2019, cost of goods sold was $278 million and accounts payable was $52 million. Landseeker's accounts payable turnover ratio in 2020 is closest to: Multiple Choice O 5.35 5.90 5.34 4.79

Here are comparative financial statement data for Bramble Company and Debra Company, two competitors. All data are as of December 31, 2022, and December 31, 2021.     Bramble Company   Debra Company     2022   2021   2022   2021 Net sales   $1,896,000       $561,000     Cost of goods sold   1,020,048       297,330     Operating expenses   257,856       79,662     Interest expense   7,584       3,927     Income tax expense   54,984       6,171     Current assets   322,500   $310,000   83,500   $78,000 Plant assets (net)   520,800   500,300   139,800   123,000 Current liabilities   64,200   75,600   34,400   29,600 Long-term liabilities   108,400   90,400   28,400   26,000 Common stock, $10 par   498,000   498,000   122,500   122,500 Retained earnings   172,700   146,300   38,000   22,900   Compute the 2022 return on assets and the return on common stockholders’ equity ratios for both companies. (Round answers to 1 decimal…

Here are comparative financial statement data for Bramble Company and Debra Company, two competitors. All data are as of December 31, 2022, and December 31, 2021.     Bramble Company   Debra company     2022   2021   2022   2021 Net sales   $1,896,000       $561,000     Cost of goods sold   1,020,048       297,330     Operating expenses   257,856       79,662     Interest expense   7,584       3,927     Income tax expense   54,984       6,171     Current assets   322,500   $310,000   83,500   $78,000 Plant assets (net)   520,800   500,300   139,800   123,000 Current liabilities   64,200   75,600   34,400   29,600 Long-term liabilities   108,400   90,400   28,400   26,000 Common stock, $10 par   498,000   498,000   122,500   122,500 Retained earnings   172,700   146,300   38,000   22,900 (a)     Prepare a vertical analysis of the 2022 income statement data for Bramble Company and Debra Company. (Round…

The following table shows income statement and balance sheet data for five U.S. industries in 2017. INCOME STATEMENT AND BALANCE SHEET FOR 2017 SELECTED U.S. INDUSTRIES FOR 2017 (Figures in $ billions) Oil and Coal Computers and Peripherals Food Food Pharmaceuticals Stores Income Statement Data: $ 682.9 $ 443.5 $ 232.0 221.7 $ 490.2 467.0 Sales $ 818.0 Cost of goods sold Balance Sheet Data: 612.1 368.4 773.8 Inventory Accounts receivable Accounts payable $ 83.8 72.6 $ 72.8 84.1 $ 27.3 39.7 87.5 $ 43.9 23.4 39.7 60.2 68.8 65.0 58.3 66.3 Note: Cost of goods sold includes selling, general, and administrative expenses. Source: U.S. Department of Commerce, Quarterly Financial Report for Manufacturing, Mining, Trade Corporations, and Selected Service Industries, Quarter 3, issued December 2017. Calculate the cash cycle for each industry. (Negative amounts should be indicated by a minus sign. Use 365 days a year. Do not round intermediate calculations. Round your answers to 1 decimal place.)…

Determining Cost of Goods Sold For a recent year, TechMart reported sales of $51,322 million. Its gross profit was $14,370 million. What was the amount of TechMart's cost of goods sold? (Enter answer in millions.)$ million