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FINANCIAL STATEMENT ANALYSIS AND RATIO ANALYSIS The following are the balance sheet and income statement data of PRT Company: December 31 1997 1998 Balance Sheet Accounts Cash P30,000 P52,000 Marketable Securities 170,000 200,000 100,000 200,000 Accounts Receivable, net Inventories 150,000 100,000 Machinery and Equipment, net 340,000 300,000 110,000 100,000 Land and Building, net Goodwill 80,000 80,000 Deferred Charges 20,000 18,000 Notes Payable, Trade 20,000 30,000 122,000 158,000 Accounts Payable, Trade Expenses Payable 8,000 12,000 Long-term Notes-Due 2008 500,000 450,000 15% Preferred Stock, P100 par 100,000 100,000 200,000 200,000 Common Stock, P10 par Retained Earnings 50,000 100,000 1998 Income Statement Accounts Sales P1,050,000 50,000 100,000 Sales Returns and Allowances Inventory, December 31, 1998 Inventory, December 31, 1997 Purchases 150,000 550,000 Selling Expenses 80,000 120,000 Administrative Expenses (including depreciation of P25,000) Interest on Long-term Notes 50,000 Income Taxes, 35% 52,500 Additional Information: 1. Dividends paid on preferred stock 15,000 2. Dividends paid on common stock 32,500 18 3. Market price per share of common stock 6. Evaluate the firm's operational efficiency for 1998 by computing: a. Gross Margin Ratio b. Profit Margin Ratio c. Return on Total Assets d. Return on Owner's Equity e. Asset Turnover Ratio

FINANCIAL STATEMENT ANALYSIS AND RATIO ANALYSIS The following are the balance sheet and income statement data of PRT Company: December 31 1997 1998 Balance Sheet Accounts Cash P30,000 P52,000 Marketable Securities 170,000 200,000 100,000 200,000 Accounts Receivable, net Inventories 150,000 100,000 Machinery and Equipment, net 340,000 300,000 110,000 100,000 Land and Building, net Goodwill 80,000 80,000 Deferred Charges 20,000 18,000 Notes Payable, Trade 20,000 30,000 122,000 158,000 Accounts Payable, Trade Expenses Payable 8,000 12,000 Long-term Notes-Due 2008 500,000 450,000 15% Preferred Stock, P100 par 100,000 100,000 200,000 200,000 Common Stock, P10 par Retained Earnings 50,000 100,000 1998 Income Statement Accounts Sales P1,050,000 50,000 100,000 Sales Returns and Allowances Inventory, December 31, 1998 Inventory, December 31, 1997 Purchases 150,000 550,000 Selling Expenses 80,000 120,000 Administrative Expenses (including depreciation of P25,000) Interest on Long-term Notes 50,000 Income Taxes, 35% 52,500 Additional Information: 1. Dividends paid on preferred stock 15,000 2. Dividends paid on common stock 32,500 18 3. Market price per share of common stock 6. Evaluate the firm's operational efficiency for 1998 by computing: a. Gross Margin Ratio b. Profit Margin Ratio c. Return on Total Assets d. Return on Owner's Equity e. Asset Turnover Ratio

Managerial Accounting
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter16: Financial Statement Analysis
Section: Chapter Questions
Problem 4PA: Measures of liquidity, solvency, and profitability The comparative financial statements of Marshall...
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FINANCIAL STATEMENT ANALYSIS AND RATIO ANALYSIS The following are the balance sheet and income statement data of PRT Company: December 31 Balance Sheet Accounts 1997 1998 Cash P30,000 P52,000 Marketable Securities 170,000 200,000 100,000 Accounts Receivable, net Inventories 200,000 100,000 150,000 Machinery and Equipment, net 340,000 300,000 110,000 100,000 Land and Building, net Goodwill 80,000 80,000 Deferred Charges 20,000 18,000 Notes Payable, Trade 20,000 30,000 122,000 158,000 Accounts Payable, Trade Expenses Payable 8,000 12,000 450,000 500,000 Long-term Notes-Due 2008 15% Preferred Stock, P100 par 100,000 100,000 200,000 200,000 Common Stock, P10 par Retained Earnings 50,000 100,000 1998 Income Statement Accounts Sales Sales Returns and Allowances P1,050,000 50,000 100,000 Inventory, December 31, 1998 Inventory, December 31, 1997 150,000 Purchases 550,000 Selling Expenses 80,000 Administrative Expenses (including depreciation of P25,000) 120,000 Interest on Long-term Notes 50,000 Income Taxes, 35% 52,500 Additional Information: 1. Dividends paid on preferred stock 15,000 2. Dividends paid on common stock 32,500 18 3. Market price per share of common stock 6. Evaluate the firm's operational efficiency for 1998 by computing: a. Gross Margin Ratio b. Profit Margin Ratio c. Return on Total Assets d. Return on Owner's Equity e. Asset Turnover Ratio 6
Transcribed Image Text:FINANCIAL STATEMENT ANALYSIS AND RATIO ANALYSIS The following are the balance sheet and income statement data of PRT Company: December 31 Balance Sheet Accounts 1997 1998 Cash P30,000 P52,000 Marketable Securities 170,000 200,000 100,000 Accounts Receivable, net Inventories 200,000 100,000 150,000 Machinery and Equipment, net 340,000 300,000 110,000 100,000 Land and Building, net Goodwill 80,000 80,000 Deferred Charges 20,000 18,000 Notes Payable, Trade 20,000 30,000 122,000 158,000 Accounts Payable, Trade Expenses Payable 8,000 12,000 450,000 500,000 Long-term Notes-Due 2008 15% Preferred Stock, P100 par 100,000 100,000 200,000 200,000 Common Stock, P10 par Retained Earnings 50,000 100,000 1998 Income Statement Accounts Sales Sales Returns and Allowances P1,050,000 50,000 100,000 Inventory, December 31, 1998 Inventory, December 31, 1997 150,000 Purchases 550,000 Selling Expenses 80,000 Administrative Expenses (including depreciation of P25,000) 120,000 Interest on Long-term Notes 50,000 Income Taxes, 35% 52,500 Additional Information: 1. Dividends paid on preferred stock 15,000 2. Dividends paid on common stock 32,500 18 3. Market price per share of common stock 6. Evaluate the firm's operational efficiency for 1998 by computing: a. Gross Margin Ratio b. Profit Margin Ratio c. Return on Total Assets d. Return on Owner's Equity e. Asset Turnover Ratio 6
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