SPREADSHEET PROBLEMS1. If a firm's net income (profits before taxes) is $120,000 and it has total assets of $1.5million, what is its return on assets?2. If a firm's total assets is $2.5 million and its return on assets is 12 percent, what is itsnet income?3. If a firm is able to sustain the same level of operations in terms of sales andadministrative expenses but reduces its materials cost by $50,000 through smarterpurchases, what is the profit-leverage effect on gross profits? What is the profit-leverage effect on profits before taxes?4. If a firm's cost of goods sold is $2.5 million and its average inventory is $500,000, whatis the inventory turnover?5. If a firm's cost of goods sold is $5 million and its inventory turnover is ten times, whatis the average inventory?6. If a firm's inventory turnover is eight times and its average inventory is $160,000, whatis the cost of goods sold?7. A retailer in Las Vegas has an ending inventory of $250,000 as of December 31, 2016,and the following accounting information.ENDING INVENTORYCOST OF GOODS SOLDMONTHJanuaryFebruaryMarchAprilMayJuneJulyAugustSeptemberOctoberNovemberDecember$225,000$325,000$240,000$325,000$460,000$220,000S85,000$156.000$220,000$265,000$100,000$350.000$1.200,000$1.250,000$1,350,000$1,500,000$950,000$850,00$1.650,000$1,325,000$1,750,000$850,000$2,200,000$3.500.000a. Compute the monthly inventory turnover ratio for each of the twelve months,b. What are the annual cost of goods sold and the average inventory for the year?c. Compute the annual inventory turnover ratio. How is the retailer's performancecompare to the industry standard, assuming its business is similar to Walmart's?

Note: We’ll answer the first question since the exact one wasn’t specified. Please submit a new…

Answered: 1. If a firm's net income (profits…

Entrepreneurial Finance

6th Edition

ISBN:9781337635653

Author:Leach

Publisher:Leach

Chapter5: Evaluating Operating And Financial Performance

Section: Chapter Questions

Problem 1EP

See similar textbooks

Similar questions

Return on assets The following data (in millions) were adapted from recent financial statements of Tootsie Roll Industries Inc. (TR): The percent a company adds to its cost of sales to determine selling price is called a markup. What is Tootsie Roll’s markup percent? Round to one decimal place.
Profitability Ratios The following data came from the financial statements of Israel Company: Revenue $900,000 Assets $600,000 Expenses 600,000 Liabilities 100,000 Net income 300,000 Average equity 500,000 Required:
Analyze and compare Zynga, Electronic Arts, and Take-Two Data (in millions) from recent financial statements of Zynga Inc. (ZNGA), Electronic Arts Inc. (EA), and Take-Two Interactive Software, Inc. (TTWO) are as follows: a. Compute the working capital for Year 2 and Year 1 for each company. b. Which company has the largest working capital? c. Compute the current ratio for Year 2 and Year 1 for each company. Round to one decimal place. d. For Year 2, rank the companies from most liquid to least liquid based upon the current ratio.
Value Chain Analysis and Financial Statement Relations. Exhibit 1.25 (page 68) presents common-size income statements and balance sheets for seven firms that operate at various stages in the value chain for the pharmaceutical industry. These common-size statements express all amounts as a percentage of sales revenue. Exhibit 1.25 also shows the cash flow from operations to capital expenditures ratios for each firm. A dash for a particular financial statement item does not necessarily mean the amount is zero. It merely indicates that the amount is not sufficiently large for the firm to disclose it. A list of the seven companies and a brief description of their activities follow. A. Wyeth: Engages in the development, manufacture, and sale of ethical drugs (that is, drugs requiring a prescription). Wyeths drugs represent primarily mixtures of chemical compounds. Ethical-drug companies must obtain approval of new drugs from the U.S. Food and Drug Administration (FDA). Patents protect such drugs from competition until other drug companies develop more effective substitutes or the patent expires. B. Amgen: Engages in the development, manufacture, and sale of drugs based on biotechnology research. Biotechnology drugs must obtain approval from the FDA and enjoy patent protection similar to that for chemical-based drugs. The biotechnology segment is less mature than the ethical-drug industry, with relatively few products having received FDA approval. C. Mylan Laboratories: Engages in the development, manufacture, and sale of generic drugs. Generic drugs have the same chemical compositions as drugs that had previously benefited from patent protection but for which the patent has expired. Generic-drug companies have benefited in recent years from the patent expiration of several major ethical drugs. However, the major ethical-drug companies have increasingly offered generic versions of their ethical drugs to compete against the generic-drug companies. D. Johnson Johnson: Engages in the development, manufacture, and sale of over-thecounter health care products. Such products do not require a prescription and often benefit from brand recognition. E. Covance: Offers product development and laboratory testing services for biotechnology and pharmaceutical drugs. It also offers commercialization services and market access services. Cost of goods sold for this company represents the salaries of personnel conducting the laboratory testing and drug approval services. F. Cardinal Health: Distributes drugs as a wholesaler to drugstores, hospitals, and mass erchandisers. Also offers pharmaceutical benefit management services in which it provides customized databases designed to help customers order more efficiently, contain costs, and monitor their purchases. Cost of goods sold for Cardinal Health includes the cost of drugs sold plus the salaries of personnel providing pharmaceutical benefit management services. G. Walgreens: Operates a chain of drugstores nationwide. The data in Exhibit 1.25 for Walgreens include the recognition of operating lease commitments for retail space. REQUIRED Use the ratios to match the companies in Exhibit 1.25 with the firms listed above.
The income statement comparison for Rush Delivery Company shows the income statement for the current and prior year. A. Determine the operating income (loss) (dollars) for each year. B. Determine the operating income (percentage) for each year. C. The company made a strategic decision to invest in additional assets in the current year. These amounts are provided. Using the total assets amounts as the investment base, calculate the ROI. Was the decision to invest additional assets in the company successful? Explain. D. Assuming an 8% cost of capital, calculate the RI for each year. Explain how this compares to your findings in part C.
. A firm has total sales of $64 million. It has gross profit of $12 million, operating income of $8.5 million, and net income of $8 million. a) What is the firm's net profit margin? b) If net profit increased to 15% from your answer in a), what percentage change does this represent?
Sheryl’s Shipping had sales last year of $16,000. The cost of goods sold was $7,700, general and administrative expenses were $2,200, interest expenses were $1,700, and depreciation was $2,200. The firm’s tax rate is 21%. What are earnings before interest and taxes? What is net income? What is cash flow from operations?
Answer this questions: 1. If the revenue is Php 94,810 and total expenses are Php 80,537, what is the net income? 2. If sales are equal to Php 600,480 and the costs of goods sold is equal to Php 374,789, what is the gross profit/margin? 3. If the company B has Php 1.048,150 liabilities, how much is its equity? 4. Given the following information, compute for the operating profit/margin: GROSS SALES: Php 600,480 COSTS OF GOODS SOLD: Php 374,789 TOTAL OPERATING EXPENSES: Php 132,916 5. A company's total investements Php 1,500,000. If Return on Investments is 35% , how much is the net profit after taxes?

Recommended textbooks for you

Entrepreneurial Finance

Finance

ISBN:

9781337635653

Author:

Leach

Publisher:

Cengage

Financial And Managerial Accounting

Accounting

ISBN:

9781337902663

Author:

WARREN, Carl S.

Publisher:

Cengage Learning,

Principles of Accounting Volume 2

Accounting

ISBN:

9781947172609

Author:

OpenStax

Publisher:

OpenStax College

Entrepreneurial Finance

Finance

ISBN:

9781337635653

Author:

Leach

Publisher:

Cengage

Financial And Managerial Accounting

Accounting

ISBN:

9781337902663

Author:

WARREN, Carl S.

Publisher:

Cengage Learning,

Principles of Accounting Volume 2

Accounting

ISBN:

9781947172609

Author:

OpenStax

Publisher:

OpenStax College

Financial Accounting Intro Concepts Meth/Uses

Finance

ISBN:

9781285595047

Author:

Weil

Publisher:

Cengage

Survey of Accounting (Accounting I)

Accounting

ISBN:

9781305961883

Author:

Carl Warren

Publisher:

Cengage Learning

EBK CFIN

Finance

ISBN:

9781337671743

Author:

BESLEY

Publisher:

CENGAGE LEARNING - CONSIGNMENT

SEE MORE TEXTBOOKS

1. If a firm's net income (profits before taxes) is $120,000 and it has total assets of $1.5 million, what is its return on assets?