Income ne Fiscal Year come taxes Ended September 30, 2017 et sales ost of products sold oss profit arketing, research, administrative expense epreciation Derating income (loss) terest expense rnings (loss) before income taxes $59,900 18,800 $41,100 18,900 930 $21,270 520 $20,750 6,381
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- Financial statement analysis The financial statements for Nike, Inc., are presented in Appendix D at the end of the text. Use the following additional information (in thousands): Instructions 1. Determine the following measures for the fiscal years ended May 31, 2016, and May 31, 2015. Round ratios and percentages to one decimal place. a. Working capital b. Current ratio c. Quick ratio d. Accounts receivable turnover e. Number of days sales in receivables f. Inventory turnover g. Number of days sales in inventory h. Ratio of liabilities to stockholders equity i. Asset turnover j. Return on total assets. k. Return on common stockholders equity l. Price-earnings ratio, assuming that the market price was 54.90 per share on May 29, 2016, and 52.81 per share on May 30, 2015 m. Percentage relationship of net income to sales 2. What conclusions can be drawn from these analyses?Financial statement data for years ending December 31 for Latchkey Company follows: a. Determine the ratio of sales to assets for 2016 and 2015. b. Does the change in the ratio of sales to assets from 2015 to 2016 indicate a favorable or an unfavorable trend?Interpreting Income Tax Disclosures. The financial statements of ABC Corporation, a retail chain, reveal the information for income taxes shown in Exhibit 2.15. REQUIRED a. Assuming that ABC had no significant permanent differences between book income and taxable income, did income before taxes for financial reporting exceed or fall short of taxable income for 2013? Explain. b. Did income before taxes for financial reporting exceed or fall short of taxable income for 2014? Explain. c. Will the adjustment to net income for deferred taxes to compute cash flow from operations in the statement of cash flows result in an addition or a subtraction for 2013? For 2014? d. ABC does not contract with an insurance agency for property and liability insurance; instead, it self-insures. ABC recognizes an expense and a liability each year for financial reporting to reflect its average expected long-term property and liability losses. When it experiences an actual loss, it charges that loss against the liability. The income tax law permits self-insured firms to deduct such losses only in the year sustained. Why are deferred taxes related to self-insurance disclosed as a deferred tax asset instead of a deferred tax liability? Suggest reasons for the direction of the change in amounts for this deferred tax asset between 2012 and 2014. e. ABC treats certain storage and other inventory costs as expenses in the year incurred for financial reporting but must include these in Inventory for tax reporting. Why are deferred taxes related to inventory disclosed as a deferred tax asset? Suggest reasons for the direction of the change in amounts for this deferred tax asset between 2012 and 2014. f. Firms must recognize expenses related to postretirement health care and pension obligations as employees provide services, but claim an income tax deduction only when they make cash payments under the benefit plan. Why are deferred taxes related to health care obligation disclosed as a deferred tax asset? Why are deferred taxes related to pensions disclosed as a deferred tax liability? Suggest reasons for the direction of the change in amounts for these deferred tax items between 2012 and 2014. g. Firms must recognize expenses related to uncollectible accounts when they recognize sales revenues, but claim an income tax deduction when they deem a particular customers accounts uncollectible. Why are deferred taxes related to this item disclosed as a deferred tax asset? Suggest reasons for the direction of the change in amounts for this deferred tax asset between 2012 and 2014. h. ABC uses the straight-line depreciation method for financial reporting and accelerated depredation methods for income tax purposes. Why are deferred taxes related to depreciation disclosed as a deferred tax liability? Suggest reasons for the direction of the change in amounts for this deferred tax liability between 2012 and 2014.
- Real-world annual report The financial statements for Nike, Inc. (NKE), are presented in Appendix E at the end of the text. The following additional information is available (in thousands): Instructions 1. Determine the following measures for the fiscal years ended May 31, 2017, and May 31, 2016. Round ratios and percentages to one decimal place. a. Working capital b. Current ratio c. Quick ratio d. Accounts receivable turnover e. Number of days sales in receivables f. Inventory turnover g. Number of days sales in inventory' h. Ratio of liabilities to stockholders equity i. Asset turnover j. Return on total assets, assuming interest expense is 82 million for the year ending May 31. 2017, and 33 million for the year ending May 31, 2016. k. k. Return on common stockholders equity l. Price-eamings ratio, assuming that the market price was 52.81 per share on May 31, 2017, and 54.35 per share on May 31, 2016. m. m. Percentage relationship of net income to sales 2. What conclusions can be drawn from these analyses?Financial Statement Analysis The financial statements for Nike, Inc., are presented in Appendix C at the end of the text. The following additional information (in thousands) is available: Instructions 1. Determine the following measures for the fiscal years ended May 31, 2013 (fiscal 2012), and May 31, 2012 (fiscal 2011), rounding to one decimal place. a. Working capital b. Current ratio c. Quick ratio d. Accounts receivable turnover e. Number of days sales in receivables f. Inventory turnover g. Number of days sales in inventory h. Ratio of liabilities to stockholders equity i. Ratio of sales to assets j. Rate earned on total assets, assuming interest expense is 23 million for the year ending May 31, 2013, and 31 million for the year ending May 31, 2012 k. Rate earned on common stockholders equity l. Price-earnings ratio, assuming that the market price was 61.66 per share on May 31, 2013, and 53.10 per share on May 31, 2012 m. Percentage relationship of net income to sales 2. What conclusions can be drawn from these analyses?Unusual income statement items Assume that the amount of each of the following items is material to the financial statements. Classify each item as either normally recurring (NR) or unusual (U) items. If unusual item, then specify if it is a discontinued operations item (DO). a. Interest revenue on notes receivable. b. Gain on sale of segment of the company's operations that manufactures bottling equipment. c.Loss on sale of investments in stocks and bonds. d. Uncollectible accounts expense. e. Uninsured flood loss. (Hood insurance is unavailable because of periodic Hooding in the area.)
- A Preparation of Ratios Refer to the financial statements for Burch Industries in Problem 12-89A and the following data. Required: 1. Prepare all the financial ratios for Burch for 2019 and 2018 (using percentage terms where appropriate and rounding all answers to two decimal places). 2. CONCEPTUAL CONNECTION Explain whether Burchs short-term liquidity is adequate. 3. CONCEPTUAL CONNECTION Discuss whether Burch uses its assets efficiently. 4. CONCEPTUAL CONNECTION Determine whether Burch is profitable. 5. CONCEPTUAL CONNECTION Discuss whether long-term creditors should regard Burch as a high-risk or a low-risk firm. 6. Perform a Dupont analysis (rounding to two decimal places) for 2018 and 2019.Cost of Goods Sold, Income Statement. and Statement of Comprehensive Income Gaskin Company derives the following items from its adjusted trial balance as of December 31, 2019: The following; additional information is also available. The December 31, 2019, ending inventory is 14,700. During 2019, 4,200 shares of'common stock were outstanding the entire year. The income tax rate 30% on all items of income. Required: 1. As a supporting document for Requirements 2 and 3, prepare a separate schedule for Gaskins cost of goods sold. 2. Prepare a 2019 single-step income statement. 3. Prepare a 2019 multiple-step income statement. 4. Prepare a 2019 statement of comprehensive income.Average Uncollectible Account Losses and Bad Debt Expense The accountant for Porile Company prepared the following data for sales and losses from uncollectible accounts: Required: 1. Calculate the average percentage of losses from uncollectible accounts for 2015 through 2018. 2. Assume that the credit sales for 2019 are $1,260,000 and that the weighted average percentage calculated in Requirement 1 is used as an estimate of loses from uncollectible accounts for 2019 credit sales. Determine the bad debt expense for 2019 using the percentage of credit sales method. 3. CONCEPTUAL CONNECTION Do you believe this estimate of bad debt expense is reasonable? 4. CONCEPTUAL CONNECTION How would you estimate 2019 bad debt expense if losses from uncollectible accounts for 2018 were What other action would management consider?
- Analyzing Starbuckss Income Statement and Cash Flow Statement Disclosures Review Starbuckss financial statements and notes in Appendix A. Required: (Note: You do not need to make any calculations.) 1. Does the company use a multiple-step or a single-step format on its income statement? Explain. 2. What was the net earnings attributable to Starbucks for 2017? What was the basic earnings per common share for 2017? 3. What was the amount of the income taxes related to income before income taxes for 2017? 4. What was the amount of general and administrative expenses in 2017? 5. What amount of depreciation and amortization expense is reported separately on the income statement for 2017? How much depreciation and amortization expense is added back to net income on the 2017 statement of cash flows? What item on the income statement includes the majority of the difference? 6. What amount of dividends on common stock was paid and declared in 2017? If these amounts differ, where is the difference on the balance sheet? 7. Are Starbuckss revenues seasonal? If so, in which two quarters did Starbucks generate the most revenues in 2016 and 2017? 8. Did Starbucks use the direct or indirect method to determine the net cash provided by operating activities in 2017? What was the amount? 9. What was the net cash used in investing activities in 2017? 10. What cash was used for financing activities in 2017?Income Statement, Statement of Retained Earnings, and Balance Sheet The following list, in alphabetical order, shows the various items that regularly appear on the financial statements of Sterns Audio Book Rental Corp. The amounts shown for balance sheet items are balances as of December 31, 2016 (with the exception of retained earnings, which is the balance on January 1, 2016), and the amounts shown for income statement items are balances for the year ended December 31, 2016. Required Prepare an income statement for the year ended December 31, 2016. Prepare a statement of retained earnings for the year ended December 31, 2016. Prepare a balance sheet at December 31, 2016. You have $1,000 to invest. On the basis of the statements you prepared, would you use it to buy stock in this company? Explain. What other information would you want before deciding?