computing the profitability
Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter9: Metric-analysis Of Financial Statements
Section: Chapter Questions
Problem 9.17E: Profitability metrics The following selected data were taken from the financial statements of The...
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Question
100%
- Is ABC, Inc. profitable? Give me your proof for your explanation by computing the profitability.
- Is the company's financial performance improvements based on the two-year data presented?
- Is the company heavily financed by debt or equity? Give me your proof for your explanation.
Transcribed Image Text:АВС, INC.
АВС, INC.
Condensed Balance Sheets
Condensed Income Statement
December 31
For the Years Ended December 31
(In millions)
(In millions)
Assets
2014
2015
2014
2015
Current Assets
1,902.0
1,617.1
Net sales
8,853.3
6,954.7
Plant Assets
2,952.8
2,526.9
Cost of goods sold
4,128.5
3,327.0
Other Assets
5,513.8
742.0
Total Assets
10,368.6
4,886.0
Gross Profit
4,724.0
3,627.7
Liabilities and Steckholderz' Equity
Selling & Admin.
3,523.6
2,551.4
Current liabilities
2,017.6
2,482.3
Nonrecuring charges
33.3
86.5
Long-term liabilities
7,289.5
1,506.2
Income from operations
1,167.9
989.8
Total libailities
9,497.1
3,988.5
Interest Expense
351.5
137.5
Stockholders' equity
Other income
Common stock
195.3
205.8
(expense), net
(12.3)
15.4
Retained eamings
1,013.3
1,065.7
Income before taxes
804.1
867.7
Treasury stock
(337.1)
(374.0)
Total stockholders' equity
871.5
897.5
Income tax expense
322.1
280.0
Total lisbilities and stockholders' equity
P 10,368.6
P4,886.0
Net income
P 482.0
P 587.7
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