a) Compute the above indicated ratios for DEL Bhd.b) Evaluate the overall performance of the company as compared to the industry average ratios. Below are the financial statementsfor DEL Bhd. for year of 2018.DEL Bhd.Balance Sheet As Al 31 DeOember 2018 (RMO0)2400 Account payable6,0004.8007.200Cash600 Notes payabie20.000 Acerued espenses24.000600 MortpageMartetatie securitiesAccount recelvablesinventeriesPrepaid expenses12.800Term Loan8.800Piant and equpmentAccumulated depreciation29.000(14.400) Common shares4.200Retained eamings16.400TOTAL ASSETSTOTAL LIABILITIES&EQUITY62,00062,000DEL Bhd.Income StutomentFor The Year Endad 31 December 2018 (RMU00)Net Sales102.000Cost of goods soldGross profitOperating expensesNet operating incomeinterest expensesEarnings before tases26.000L18.0008,0004.000Income taxesEARNINGS AFTER TAXES1,600Industry Average RatiosCurent ratioQuick ratioDebt ratioTime interest eamed2.55 x Inventory turnover1.70 x Average collection period70% Net profit margin2.5 x Retum on equity3.6x63 days4.5%19.5%

Indicated ratios are the same as Industry average ratios. So, the ratios that need to be computed…

Answered: Compute the above indicated ratios for…

Compute the above indicated ratios for DEL Bhd. b) Evaluate the overall performance of the company as compared to the industry average ratios

Financial Accounting

15th Edition

ISBN:9781337272124

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter6: Accounting For Merchandising Businesses

Section: Chapter Questions

Problem 5PA: The following selected accounts and their current balances appear in the ledger of Clairemont Co....

See similar textbooks

Related questions

Q: Find the future value of £2000 when it grows at an annually compounded rate of 5% for 10 years. An…

A: Future Value, FV=PV(1+i)n Here, PV (Present Value) = 2000 i (interest rate) = 5% = 0.05 n (number…

Q: has a debt ratio of 55% What is its debt/equity ratio?

A: Given, Debt ratio = 55% Equity ratio = ( 1 - Debt ratio) = 1 - 0.55 = 0.45

Q: What is correct about rent control? Question 4 options: It often hurts those it tries to…

A: Rent control can be defined as the process which puts ceiling on the maximum limit of rent offered…

Q: Not use excel Q)You take out a home loan for $250,000, with an annual interest rate of 6% for 30…

A: Solution:- When a loan is taken, it is to be repaid as a lump sum payment or in installments. When…

Q: Determine the increase or decrease in cash for last year given the following information. Net income…

A: Solution: Cash flow means the cash generated or paid during a period by a firm.

Q: We can get a sense of how model output responds to changes in inputs from sensitivity analyses. Some…

A: Sensitivity analysis is used to find out the change in input of one value lead to change in the…

Q: Compute the price of a share of stock that pays a 2 per year dividend and that you expect to be able…

A: Shares, often known as stocks or stock shares, indicate a corporation's equity ownership divided…

Q: Suppose you take out a 20-year mortgage for a house that costs $286,205. Assume the following: The…

A: Rule 28% says that any persons total housing expenses could not be greater than 28% of gross salary.…

Q: Using the same information, what is the amount of the S Corporation premium if the cash flow for the…

A: Cash flow is basically the inflow and outflow of money, where we deal with operating activities,…

Q: We have a $1,000, 8-year, 5% bond that is currently priced at 104 (104% of the par value or $1,040).…

A: As per Bartleby guidelines, If multiple questions are posted , only first 1 question will be…

Q: Normal backwardation maintains that, for most commodities, there are natural hedgers who desire to…

A: Futures options are a type of asset that allows traders to buy and sell futures contracts at…

Q: This question conoerns BCA for building a permanent dam. The cost of constructing the permanent dam…

A: “Since you have posted a question with multiple sub-parts, we will solve first three subparts for…

Q: Alpha Resources has sales revenue of $800,000, operating costs of $400,000, and depreciation expense…

A: Sales = $800,000 Operating cost = $400,000 Depreciation = $20,000 Bonds = $300,000 Interest rate =…

Q: How much will the company pay in total if they are going to pay all these costs today? Interest for…

A: The amount the company will pay today can be found using the present value concept. By discounting…

Q: expects to have EPS (earning per share) of $5 in the coming year. The firms plan to pay all of its…

A: Cost of equity depends on the dividend to be paid and how much that is going to be retained over the…

Q: Consider a stock currently trading at $10, with expected annual return of 15% and annual volatility…

A: Current Stock price is $10 Expected annual return is 15% Annual Volatility is 0.2 To Find:…

Q: Consider a European Call Option with a strike of 82. The current price of the underlying asset is…

A: Call option price is 6.22 Risk free rate is 4.1% TIme to expiry is 5 months Strike price is 82 Stock…

Q: The preferred stock price per share is $40 and pays a $2 dividend. Common stock shares sell for $20…

A: Since you have posted a question with multiple sub-parts, we will solve first three subparts for…

Q: • Gantt chart or net present value (NPV). Year Annual benefits Annual operating costs 6% discount…

A: Net present value is the difference between Present Value of cash Inflows and present value of cash…

Q: 3b. Inflation is expected to average 2.4% per year for the next 44 years. What percentage of the…

A: We have to find the % loss in the purchasing power of the dollar under the given inflation scenario.

Q: If the market price for an option is lower than what the value is from using the binomial model what…

A: Options are contracts that provide the buyer the right, but not the responsibility, to buy or sell a…

Q: ABC Inc expects to have EPS (earning per share) of $5 in the coming year. The firms plan to pay all…

A: Old price of stock is $50 Dividend is $5

Q: Poor credit is between

A: A credit score is a numerical expression that represents a person's creditworthiness based on a…

Q: per year. Triple Crown's discount rate is 12%. What is the net present value of this investment…

A: Net present value (NPV) of an alternative/project refers to the variance between the initial…

Q: You have borrowed $40,000 to buy a new car and have an 8%, 48 month loan. How much interest will you…

A: A loan amortization schedule can be defined as a table showing the periodic repayment of principal,…

Q: A wealthy donor has given $400,000 to a university and specifies that it is to be used to give…

A: Here, Present value (P0)= $400,000 Interest rate (r) = 0.055 Number of years (N) = 25 years No. of…

Q: Suppose that a 10-year T-note is purchased with a face value of $20,000 and a coupon rate of 3.4%…

A: Return means an additional amount earned over the invested amount. It is computed on the basis of…

Q: You have just been offered a contract worth $1.00 million per year for 5 years. However, to take the…

A: Given, As for 5 years, We will get $1.00 million every year. And now we have to purchase the…

Q: pany is trying to determine its WACC. The following data is avail Bond rate yr. average return rice…

A: WACC is the weighted average cost of capital that includes the weighted cost of equity and weighted…

Q: You purchase an RV by making a down payment of $10,700. The terms of your finance agreement have an…

A: Down payment (DP) = $10,700 Interest rate = 2.56% Monthly interest rate (r) = 2.56%/12 =…

Q: You have taken a loan of $63,000.00 for 36 years at 5.5% compounded quarterly. Fill in the table…

A: Quaterly Payment: Solved using Financial Calculator N = 36 years * 4 quarters = 144 I/Y = 1.375% PV…

Q: 6b. An initial $2000 investment is made that returns profits of $1000 and 1500 in the first and…

A: Here, Initial Investment is $2,000 Profit in Year 1 is $1,000 Profit in Year 2 is $1,500 Inflation…

Q: are given the following information about Jordan plc: Financial position statement at January 2017…

A: To Find: Weighted Average cost of capital

Q: what would be the predicted new bond price according to duration?

A: Bond valuation refers to a method which is used to compute the current value or present value (PV)…

Q: on the advantages and/or criticisms of the two theories. according the economic theory of contract…

A: By banning involuntary appropriation, property law promotes people to get the most out of their…

Q: It costs P500,000 at the end of each year to maintain a section of Kennon Road in Baguio City. If…

A: The question is based on the concept of the present value of money. The present value is calculated…

Q: 5.1 Frasier needs £250,000 to set up his business. Bank A is willing to lend him the money under the…

A: Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only one…

Q: A new CNC machine is purchased for $40,000. The salvage value of the CNC machine is expected to be…

A: Modified accelerated rate of depreciation(MACRS) is the rate of depreciation used for determining…

Q: Suppose you want to buy a $147,000 home. You found a bank that offers a 30-year loan at 3.3% APR.…

A: Mortgage/ Borrowings: Borrowings are the loan which is taken by the individual to meet its…

Q: Which of the following is an asset of the Fed? Federal Reserve notes

A: Federal reserve assets include Gold, Special drawing rights, reserve position in IMF, Foreign…

Q: A firm earns $895 million in profits and pays $626 million in dividends for the year. The firm has…

A: Dividend: The dividends are the returns provided to the shareholders by the company. The dividends…

Q: ou pay no intere True

A: A debit card allows users to pay by deducting money customer’s bank account instead of borrowing…

Q: Suppose you are a city planner. You are reviewing proposals for a new park and a new bus station.…

A: Total quality management (TQM) is defined as a management approach to long-term success based on…

Q: Scooter wishes to sell a bond that has a face value of $1,075. The bond bears an interest rate of…

A: Face value (FV) = $1075 Interest rate = 9.85% Quarterly interest rate (r) = 9.85%/4 = 2.4625% Yield…

Q: What are the benefits to the back for amortizing a loan

A: In finance amortized loan is one in which fixed monthly payments are made by the borrower to the…

Q: KIMEP just went public. As a growing firm, it is not expected to pay a dividend for the first five…

A: The stock price at the end of Year 5 is calculated as ratio of dividend at end of Year 6 and the…

Q: What will be Mr. Smith's monthly payment?

A: Loan Payments: These are payments made to amortize the loan amount by the borrower. Hence, these…

Q: Q2 Table 2 shows cash flow information of business account with rate of return 8% per year.…

A: We have to find the future value of a series of cash flow.

Q: A firm's stock has a market capitalization of 385 million and an equity beta of 0.6. Bonds issued by…

A: The cost of capital of a company is the minimum return expected from a company by its capital…

Q: Okay credit is between

A: A credit score is a three-digit figure that varies between 300 and 900. The credit reporting…

Question

a) Compute the above indicated ratios for DEL Bhd.

b) Evaluate the overall performance of the company as compared to the industry average ratios.

Below are the financial statements
for DEL Bhd. for year of 2018.
DEL Bhd.
Balance Sheet As Al 31 DeOember 2018 (RMO0)
2400 Account payable
6,000
4.800
7.200
Cash
600 Notes payabie
20.000 Acerued espenses
24.000
600 Mortpage
Martetatie securities
Account recelvables
inventeries
Prepaid expenses
12.800
Term Loan
8.800
Piant and equpment
Accumulated depreciation
29.000
(14.400) Common shares
4.200
Retained eamings
16.400
TOTAL ASSETS
TOTAL LIABILITIES
&EQUITY
62,000
62,000
DEL Bhd.
Income Stutoment
For The Year Endad 31 December 2018 (RMU00)
Net Sales
102.000
Cost of goods sold
Gross profit
Operating expenses
Net operating income
interest expenses
Earnings before tases
26.000
L18.000
8,000
4.000
Income taxes
EARNINGS AFTER TAXES
1,600
Industry Average Ratios
Curent ratio
Quick ratio
Debt ratio
Time interest eamed
2.55 x Inventory turnover
1.70 x Average collection period
70% Net profit margin
2.5 x Retum on equity
3.6x
63 days
4.5%
19.5%

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Step by step

Solved in 3 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

The following selected accounts and their current balances appear in the ledger of Clairemont Co. for the fiscal year ended May 31, 2019: Instructions 1. Prepare a multiple-step income statement. 2. Prepare a statement of owners equity. 3. Prepare a balance sheet, assuming that the current portion of the note payable is 50,000. 4. Briefly explain how multiple-step and single-step income statements differ.
Prince Corporations accounts provided the following information at December 31, 2019: What should be the current balance of retained earnings? a. 520,000 b. 580,000 c. 610,000 d. 670,000
Ratio Analysis Rising Stars Academy provided the following information on its 2019 balance sheet and state mcnt of cash flows: Long-term debt S 4,400 Interest expense S 398 Total liabilities 8,972 Net income 559 Total assets 38,775 Interest payments 432 Total equity 29,803 Cash flows from operations 1.015 Operating income 1.223 Income tax expenses 266 Income taxes paid 150 Required: Calculate the following ratios for Rising Stars: (a) debt to equity, (b) debt to total assets, (c) long-term debt to equity, (d) times interest earned (accrual basis), and (e) times interest earned (cash basis). (Note: Round answers to three decimal places.) CONCEPTUAL CONNECTION Interpret these results. 3.What does it mean if a bond is callable
Balance Sheet Baggett Companys balance sheet accounts and amounts as of December 31, 2019, are shown in random order as follows: Required: 1. Prepare a December 31, 2019, balance sheet for Baggett. 2. Compute the debt to-assets ratio.
Below is a trial balance of Ali Mamat Enterprise, extracted after one year’s trading. Ali Mamat EnterpriseTrial Balance as at 31 December 2019Particulars Debit (RM) Credit (RM)Sales 190,576Purchases 119,832Salaries 56,527Motor expenses 2,416Rent 1,894Insurance 372General expenses 85Premises 95,420Motor vehicles 16,594Account receivables 26,740Account payable 16,524Cash at bank 16,519Cash in hand 342Drawings 8,425Capital 138,066TOTAL 345,166 345,166 Required:i. Statement of Profit or Loss and Others Comprehensive Income for the yearended 31 December 2019.ii. Statement of Financial Position as at 31 December 2019.
1. Below is a trial balance of Ali Mamat Enterprise, extracted after one year’s trading.Ali Mamat EnterpriseTrial Balance as at 31 December 2019Particulars Debit (RM) Credit (RM)Sales 190,576Purchases 119,832Salaries 56,527Motor expenses 2,416Rent 1,894Insurance 372General expenses 85Premises 95,420Motor vehicles 16,594Account receivables 26,740Account payable 16,524Cash at bank 16,519Cash in hand 342Drawings 8,425Capital 138,066TOTAL 345,166 345,166Required: i. Statement of Profit or Loss and Others Comprehensive Income for the year ended 31 December 2019.ii. Statement of Financial Position as at 31 December 2019.
The following are the summarised financial information of Ting Ltd for the two financial years ended 31 October 2020 are as follows:2019 2020£ million £ millionEquity 2,460.8 1,732.8 Non-current liabilities (Loans) 640.0 800.0 Current liabilities 654.4 1,020.5 Non-current assets 2,804.8 2,367.2 Current assets 950.4 962.4 Revenue 1,601.6 1,509.6 Total expenses 1,444.0 1,492.8 Required:(a) Calculate the following financial ratios for the two years: 2019 and 2020:(i) Current ratio (ii) Capital gearing ratio (iii) Profit margin (b) Comment briefly on the ratios of the company, computed in part (a) over the two year period from 2019 to 2020. (c) Provide any two (2) recommendations on how the company may improve these ratios in the futur.
Choose the correct letter of answer: Company F Statement of Financial Positions at December 31, 2020 shows the following: Cash P4,000.00, Marketable Securities P8,000.00, Accounts Receivable P100,000.00, Inventories P120,000.00, Prepaid Expenses P1,000.00, Notes Payable (short term) P5,000.00, Accounts Payable P150,000.00, Accrued Expenses P20,000.00, Income taxes payable P1,000.00, and long-term liabilities P340,000.00. Determine the following: current ratio and quick ratio. a. 1.32 and 0.64b. 1.52 and 0.82c. 1.82 and 0.86d. 1.98 and 1.54e. 2.2 and 2.1
Using the Balance Sheet and Income Statement please calculate the following: Balance Sheet Assets Liabilities and Owner’s Equity 2018 2019 2018 2019 Current Assets Current Liabilities Cash 300 325 Acts Pay 480 400 Accs Rec 275 270 Notes Pay 560 500 Inventory 600 675 Total 1,040 900 Total 1,175 1,270 Long Term Debt 950 1,200 Fixed Assets Net Fixed 2,350 2,875 Owners Equity Preferred Stock 750 845 Retained Earn 785 1,200 Total 1,535 2,045 Total Assets 3,525 4,145 Total Liabilities & OE 3,525 4,145 2019 Income Statement Net Sales 3,456 COGS 1,895 Depreciation 235 EBIT 1,326 Interest 320 Taxable Income 1,006 Taxes 211.26 Net Income 794.74 Dividends 147 Additions to Retained Earnings 647.74…
On January 1, 2021, the general ledger of ACME Fireworks includes the following account balances:Accounts Debit CreditCash $ 25,100Accounts Receivable 46,200Allowance for Uncollectible Accounts $ 4,200Inventory 20,000Land 46,000Equipment 15,000Accumulated Depreciation 1,500Accounts Payable 28,500Notes Payable (6%, due April 1, 2022) 50,000Common Stock 35,000Retained Earnings…
10 Ji Lui’s statement of financial position was prepared on 31 December 2018. It showed the followingassets and liabilities:$Machinery 7200Trade receivables 800Inventory 1300Other payables 830Creditors 510Cash 180Bank (debit balance) 250a Calculate Ji Lui’s owner’s equity on 31 December 2018. [2 marks]........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................On 1 January 2019, the following transactions took place:i) Ji Lui paid salaries for December 2018 in cash $319.ii) Ji Lui took cash $89 for her own personal…
The following accounts were included on Nigel’s adjusted trial balance at December 31, 2020:Accounts payable 11,200Accounts receivable 8,000Cash 29,000Share capital-ordinary 50,000Retained earnings 25,000Dividends 9,000Interest expense 3,500Note payable, due 30/06/23 45,000Supplies 2,800Sales revenue 39,000Building 15,000(a) What are total current assets? (b) What are total non-current liabilities?