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Brass Corporation declared and paid $4,700 of cash dividends during the current year ended December 31. Its financial statements also reported the following summarized data: Income Statement Sales revenue Cost of goods sold Gross profit Operating expenses Interest expense Income before income taxes Income tax expense Net income Balance Sheet Cash Accounts receivable (net) Inventory Property and equipment (net) Total assets Current liabilities Notes payable (long-term) Current $ 265,000 144,000 121,000 70,300 4,400 46,300 13,890 $ 32,410 $ 8,210 36,000 57,000 62,000 $ 163,210 $ 16,500 62,000 Previous $ 233,000 134,000 99,000 64,000 4,300 30,700 4,700 $ 26,000 $ 9,700 31,500 52,000 55,000 $ 148,200 $ 30,900 62,000

Brass Corporation declared and paid $4,700 of cash dividends during the current year ended December 31. Its financial statements also reported the following summarized data: Income Statement Sales revenue Cost of goods sold Gross profit Operating expenses Interest expense Income before income taxes Income tax expense Net income Balance Sheet Cash Accounts receivable (net) Inventory Property and equipment (net) Total assets Current liabilities Notes payable (long-term) Current $ 265,000 144,000 121,000 70,300 4,400 46,300 13,890 $ 32,410 $ 8,210 36,000 57,000 62,000 $ 163,210 $ 16,500 62,000 Previous $ 233,000 134,000 99,000 64,000 4,300 30,700 4,700 $ 26,000 $ 9,700 31,500 52,000 55,000 $ 148,200 $ 30,900 62,000

Financial Accounting Intro Concepts Meth/Uses
Financial Accounting Intro Concepts Meth/Uses
14th Edition
ISBN:9781285595047
Author:Weil
Publisher:Weil
Chapter1: Introduction To Business Activities And Overview Of Financial Statements And The Reporting Process
Section: Chapter Questions
Problem 31E
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Brass Corporation declared and paid $4,700 of cash dividends during the current year ended December 31. Its financial statements also reported the following summarized data: Income Statement Sales revenue Cost of goods sold Gross profit Operating expenses Interest expense. Income before income taxes. Income tax expense Net income Balance Sheet Cash Cash Accounts receivable (net) Inventory Property and equipment (net) Total assets Current liabilities Notes payable (long-term) Common stock (par $5) Additional paid-in capital Retained earnings. Total liabilities and stockholders' equity Required: Current $ 265,000 144,000 121,000 70,300 4,400 46,300 13,890 $ 32,410 Required 1 $ 8,210 36,000 57,000 62,000 $ 163,210 Required 2 Required 3 1-a. Current Year 1-a. Previous Year 1-b. Current year gross profit percentage is: Previous 1. Compute the gross profit percentage for the current and previous years. Are the current-year results better, or worse, than those for the previous year? $ 233,000 134,000 99,000 64,000 4,300 30,700 2. Compute the net profit margin for the current and previous years. Are the current-year results better, or worse, than those for the previous year? 3. Compute the earnings per share for the current and previous years. Are the current-year results better, or worse, than those for the previous year? TIP: To calculate EPS, use the balance in Common Stock to determine the number of shares outstanding. Common Stock equals the par value per share times the number of shares. 4. Stockholders' equity totaled $40,200 at the beginning of the previous year. Compute the return on equity (ROE) ratios for the current and previous years. Are the current-year results better, or worse, than those for the previous year? 5. Net property and equipment totaled $43,500 at the beginning of the previous year. Compute the fixed asset turnover ratios for the current and previous years. Are the current-year results better, or worse, than those for the previous year? 6. Compute the debt-to-assets ratios for the current and previous years. Is debt providing financing for a larger or smaller proportion of the company's asset growth? 7. Compute the times interest earned ratios for the current and previous years. Are the current-year results better, or worse, than those for the previous year? 4,700 26,000 $ 16,500 62,000 $ 30,900 62,000 40,200 40,200 8,400 6,700 8,400 36,110 $ 163,210 $ 148,200 8. After Brass released its current year's financial statements, the company's stock was trading at $47. After the release of its previous year's financial statements, the company's stock price was $35 per share. Compute the P/E ratios for both years. Does it appear that investors have become more (or less) optimistic about Brass's future success? $ 9,700 31,500 52,000 55,000 $ 148,200 Complete this question by entering your answers in the tabs below. Required 4 % % Required 5 Required 6 Required 7 1-a. Compute the gross profit percentage for the current and previous years. (Round percentage values to 1 decimal place.) 1-b. Are the current-year results better, or worse, than those for the previous year? Required 8
Transcribed Image Text:Brass Corporation declared and paid $4,700 of cash dividends during the current year ended December 31. Its financial statements also reported the following summarized data: Income Statement Sales revenue Cost of goods sold Gross profit Operating expenses Interest expense. Income before income taxes. Income tax expense Net income Balance Sheet Cash Cash Accounts receivable (net) Inventory Property and equipment (net) Total assets Current liabilities Notes payable (long-term) Common stock (par $5) Additional paid-in capital Retained earnings. Total liabilities and stockholders' equity Required: Current $ 265,000 144,000 121,000 70,300 4,400 46,300 13,890 $ 32,410 Required 1 $ 8,210 36,000 57,000 62,000 $ 163,210 Required 2 Required 3 1-a. Current Year 1-a. Previous Year 1-b. Current year gross profit percentage is: Previous 1. Compute the gross profit percentage for the current and previous years. Are the current-year results better, or worse, than those for the previous year? $ 233,000 134,000 99,000 64,000 4,300 30,700 2. Compute the net profit margin for the current and previous years. Are the current-year results better, or worse, than those for the previous year? 3. Compute the earnings per share for the current and previous years. Are the current-year results better, or worse, than those for the previous year? TIP: To calculate EPS, use the balance in Common Stock to determine the number of shares outstanding. Common Stock equals the par value per share times the number of shares. 4. Stockholders' equity totaled $40,200 at the beginning of the previous year. Compute the return on equity (ROE) ratios for the current and previous years. Are the current-year results better, or worse, than those for the previous year? 5. Net property and equipment totaled $43,500 at the beginning of the previous year. Compute the fixed asset turnover ratios for the current and previous years. Are the current-year results better, or worse, than those for the previous year? 6. Compute the debt-to-assets ratios for the current and previous years. Is debt providing financing for a larger or smaller proportion of the company's asset growth? 7. Compute the times interest earned ratios for the current and previous years. Are the current-year results better, or worse, than those for the previous year? 4,700 26,000 $ 16,500 62,000 $ 30,900 62,000 40,200 40,200 8,400 6,700 8,400 36,110 $ 163,210 $ 148,200 8. After Brass released its current year's financial statements, the company's stock was trading at $47. After the release of its previous year's financial statements, the company's stock price was $35 per share. Compute the P/E ratios for both years. Does it appear that investors have become more (or less) optimistic about Brass's future success? $ 9,700 31,500 52,000 55,000 $ 148,200 Complete this question by entering your answers in the tabs below. Required 4 % % Required 5 Required 6 Required 7 1-a. Compute the gross profit percentage for the current and previous years. (Round percentage values to 1 decimal place.) 1-b. Are the current-year results better, or worse, than those for the previous year? Required 8
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