Although sales of wayway Co. increased by P8,000 and unit cost also increased by 5%, its gross profit increased in 2007 by39.5% or by P11,850. In view of these, the gross profit went up from 30% in 2006 to 38.75% in 2007. The percent change in volume should be a. 5% increase b.) 5% decrease c.) 10% increase d.) 10% decrease and The favorable/unfavorable effect of price factor was a.) P18,000 unfavorable b.) P18,000 favorable c.) P3,150 favorable d.) P3,150 unfavorable

Although sales of wayway Co. increased by P8,000 and unit cost also increased by 5%, its gross profit increased in 2007 by39.5% or by P11,850. In view of these, the gross profit went up from 30% in 2006 to 38.75% in 2007. The percent change in volume should be a. 5% increase b.) 5% decrease c.) 10% increase d.) 10% decrease and The favorable/unfavorable effect of price factor was a.) P18,000 unfavorable b.) P18,000 favorable c.) P3,150 favorable d.) P3,150 unfavorable

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter12: Corporate Valuation And Financial Planning

Section: Chapter Questions

Problem 6P

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From last year to this year, Berry Barn reported that itsNet Sales increased from $300,000 to $400,000 and itsGross Profit increased from $90,000 to $130,000. Was theGross Profit increase caused by ( a ) an increase in salesvolume only, ( b ) an increase in gross profit per sale only,or ( c ) a combination of both? Explain your answer.
5. The total sales this year is ₱1,200,000, which resulted from an increase in sales for 10%. How much was the sales for last year? 6. The total current asset is 45%, total liability is 60%, total equity is ₱300,000. How much is the total noncurrent assets? 7. The Gross Profit is 40%, total sales is ₱625,000. The company incurred an operating expense of 20%, assuming that there is no non-operating items were incurred, how much would be the net profit? 8. The net profit this year is decreased by 10% due to the pandemic. How much was the net profit last year if the company reported a net profit of ₱90,000 this year? 9. If the current assets are 62.5% , the total assets are ₱600,000, owner’s equity is twice the total liabilities, how much is the total owner’s equity? 10. The total sales for this year is ₱5,000,000, cost of sales if 30%, operating expense is 20%, net profit before tax is 40%, how much is the non-operating items?
Rappaport Corp.'s sales last year were $375,000, and its net income after taxes was $23,000. What was its profit margin on sales? Select the correct answer. a. 6.19 % b. 6.21 % c. 6.17 % d. 6.13 % e. 6.15 %
Krating Corporation has the following ratios: A0*/S0 = 1.6; L0*/S0 = 0.4; Profit Margin = 0.10; and Dividend Payout Ratio = 0.45, or 45%. Sales last year were $100 million, suppose Krating’s financial consultants report (1) that the Inventory Turnover Ratio (sales/inventory) is 3, compared with an Industry Average of 4, and (2) that Krating could reduce inventories and thus raise its Turnover Ratio to 4 without affecting its Sales, Profit Margin, or other Asset Turnover Ratios. Under these conditions, use the AFN equation to determine the amount of additional funds Krating would require during the 1st year if sales grow at a rate of 20% per year. Show Solutions and Explain. Under these conditions, use the AFN equation to determine the amount of additional funds Krating would require during the 2nd year if sales grow at a rate of 20% per year. Show Solutions and Explain.
The Barnsdale Corporation has the following ratios: A0*/S0 = 1.6; L0*/S0 = 0.4; profit margin = 0.10; and dividend payout ratio = 0.45, or 45%. Sales last year were $100 million. suppose Barnsdale’s financial consultants report (1) that the inventory turnover ratio (sales/inventory) is 3, compared with an industry average of 4, and (2) that Barnsdale could reduce inventories and thus raise its turnover ratio to 4 without affecting its sales, profit margin, or other asset turnover ratios. 1.) Under these conditions, use the AFN equation to determine the amount of additional funds Barnsdale would require during the 1st year if sales grow at a rate of 20% per year. 2.)Under these conditions, use the AFN equation to determine the amount of additional funds Barnsdale would require during the 2nd year if sales grow at a rate of 20% per year.
The Barnsdale Corporation has the following ratios: A0*/S0 = 1.6; L0*/S0 = 0.4; profit margin = 0.10; and dividend payout ratio = 0.45, or 45%. Sales last year were $100 million. suppose Barnsdale’s financial consultants report (1) that the inventory turnover ratio (sales/inventory) is 3, compared with an industry average of 4, and (2) that Barnsdale could reduce inventories and thus raise its turnover ratio to 4 without affecting its sales, profit margin, or other asset turnover ratios. Requirement: a. Under these conditions, use the AFN equation to determine the amount of additional funds Barnsdale would require during the 1st year if sales grow at a rate of 20% per year. Sample format: 1,111,111 b. Under these conditions, use the AFN equation to determine the amount of additional funds Barnsdale would require during the 2nd year if sales grow at a rate of 20% per year. Sample format: 1,111,111
Rappaport Corp.'s sales last year were $320,000, and its net income after taxes was $23,000. What was its profit margin on sales? A 6.49% B 6.83% C 7.19% D 7.55%
During the current year, the net sales of Ridgeway, Inc., were 10 percent below last year’s level. You should expect Ridge-way’s semivariable costs to: a. Decrease in total, but increase as a percentage of net sales.b. Increase in total and increase as a percentage of net sales.c. Decrease in total and decrease as a percentage of net sales.d. Increase in total, but decrease as a percentage of net sales.
The Nyameye Manufacturing Company increased its merchandise inventory by GH¢17,000 over the year. The company also granted its customers more liberal credit terms which increased the accounts receivable by GH¢37,500. Sales were GH¢975,000, and the accounts payable decreased by GH¢27,500. The gross profit on sales is 45%. Marketing and administrative expenses were GH¢145,000; this included depreciation expense of GH¢4,000. What were the cash disbursements for the year? A. GH¢721,750. B. GH¢706,500. C. GH¢689,500. D. GH¢599,750.
The Nyameye Manufacturing Company increased its merchandise inventory by GH¢17,000 over the year. The company also granted its customers more liberal credit terms which increased the accounts receivable by GH¢37,500. Sales were GH¢975,000, and the accounts payable decreased by GH¢27,500. The gross profit on sales is 45%. Marketing and administrative expenses were GH¢145,000; this included depreciation expense of GH¢4,000. What were the cash disbursements for the year?
1. DRS Sdn. Bhd. earned operating income last year as shown in the following income statement: Sales = 580000 Cost of goods sold = 333000 Gross margin = 247000 Selling and administrative expense = 190000 Operating income = 57000 At the beginning of the year, the value of operating assets was RM177,000. At the end of the year, the value of operating assets was RM277,000. DRS Sdn. Bhd. requires a minimum rate of return of 10%. a) Calculate the return on investment (ROI). b) Calculate the residual income (RI).
Last year, Jumpin’ Trampolines (JT) had a quick ratio of 1.0, a current ratio of 1.8, an inventory turnover of 3.5, total current assets of $67,500, and cash and equivalents of $15,000. If the cost of goods sold equaled 70 percent of sales, what were JT’s annual sales and DSO? Please answer vertically