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1. Using year-end balances for all ratios, compute the t

1. Using year-end balances for all ratios, compute the t

Century 21 Accounting General Journal
Century 21 Accounting General Journal
11th Edition
ISBN:9781337680059
Author:Gilbertson
Publisher:Gilbertson
Chapter17: Financial Statement Analysis
Section: Chapter Questions
Problem 4AP
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1 The current year financial statements for Blue Water Company and Prime Fish Company are presented below Balance sheet Cash Accounts receivable (net) Inventory Property & equipment (net) Other asset Total assets Current liabilities Long-term debt (interest rate: 106) Capital stock ($10 per value) Additional paid-in capital Retained earnings Total liabilities and stockholders' equity Iscome statement Sales revenue (1/3 on credit) Cost of goods sold Operating expenses Net incor Other date Per share stock price at end of current year Average income tax rate Dividends declared and paid is current year Profitability ration: Required: 1. Using year-end balances for all ratios, compute the following ratios: Ratin 1. Retum on equity ratio on assets ratio 3. Gross profit margin 4. Net profit margin ratio 5. Earnings per share ratio Asset lumover ratios: 6. Total asset turnover ratio 7. Fixed asset tumover ratio 8. Receivable tumover ratio 9. Inventory tumover ratio Liquidity ratios 10. Current ratio 11. Quick ratio : 12. Cash ratio Solvency ratios 13. Debt to equity ratio Market radios Both companies are in the fish catching and manufacturing business. Both have been in business approximately 10 years, and each has had steady growth. The management of each has a different viewpoint in many respects. Blue Water is more conservative, and as its president has said, "We avoid what we consider to be undue risk. Neither company is publicly held. 14. Price eurings 15. Dividend yield ratio BLUE WATER COMPANY Note: Round your intermediate calculations and final answers to 2 decimal places. Enter percentage answers rounded to 2 decimal places (ie. 0.1234 should be entered as 12.34). $ 18.91 % 11.19% 46.09% 10.07% 2.13 1.11 3.19 3.92 243 1.80 0.80 0.41 0.69 10.34 0.10% S PRIME FISH COMPANY 1.01 2.00 13.21 % 11.40% 50.12 % 11.35 % 124 8.62 10.00 1.60 1.06 043 $ 41,000 38,000 95,000 140,000 $4,000 $400,000 $ 99,000 65,000 140,000 29,000 61,000 $ 402,000 0.16 $.447,000 (241,000) 161,000 $ 45,000 12.06 0.19% $ 33,000 1:22 30% $ 21,909 31,000 45,000 401,000 305,000 $ 790,000 A 49,000 40,000 512,000 106,000 71,000 $ 798,000 $ 602,000 (400,000) (311,000) $ $1,000 $ 15 30% $ 140,000
Transcribed Image Text:1 The current year financial statements for Blue Water Company and Prime Fish Company are presented below Balance sheet Cash Accounts receivable (net) Inventory Property & equipment (net) Other asset Total assets Current liabilities Long-term debt (interest rate: 106) Capital stock ($10 per value) Additional paid-in capital Retained earnings Total liabilities and stockholders' equity Iscome statement Sales revenue (1/3 on credit) Cost of goods sold Operating expenses Net incor Other date Per share stock price at end of current year Average income tax rate Dividends declared and paid is current year Profitability ration: Required: 1. Using year-end balances for all ratios, compute the following ratios: Ratin 1. Retum on equity ratio on assets ratio 3. Gross profit margin 4. Net profit margin ratio 5. Earnings per share ratio Asset lumover ratios: 6. Total asset turnover ratio 7. Fixed asset tumover ratio 8. Receivable tumover ratio 9. Inventory tumover ratio Liquidity ratios 10. Current ratio 11. Quick ratio : 12. Cash ratio Solvency ratios 13. Debt to equity ratio Market radios Both companies are in the fish catching and manufacturing business. Both have been in business approximately 10 years, and each has had steady growth. The management of each has a different viewpoint in many respects. Blue Water is more conservative, and as its president has said, "We avoid what we consider to be undue risk. Neither company is publicly held. 14. Price eurings 15. Dividend yield ratio BLUE WATER COMPANY Note: Round your intermediate calculations and final answers to 2 decimal places. Enter percentage answers rounded to 2 decimal places (ie. 0.1234 should be entered as 12.34). $ 18.91 % 11.19% 46.09% 10.07% 2.13 1.11 3.19 3.92 243 1.80 0.80 0.41 0.69 10.34 0.10% S PRIME FISH COMPANY 1.01 2.00 13.21 % 11.40% 50.12 % 11.35 % 124 8.62 10.00 1.60 1.06 043 $ 41,000 38,000 95,000 140,000 $4,000 $400,000 $ 99,000 65,000 140,000 29,000 61,000 $ 402,000 0.16 $.447,000 (241,000) 161,000 $ 45,000 12.06 0.19% $ 33,000 1:22 30% $ 21,909 31,000 45,000 401,000 305,000 $ 790,000 A 49,000 40,000 512,000 106,000 71,000 $ 798,000 $ 602,000 (400,000) (311,000) $ $1,000 $ 15 30% $ 140,000
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