Income Statement for the year ending 31 December 2012 Sales revenue 75 000 Beginning inventory Purchases 12 000 40 000 52 000 Less ending inventory Cost of goods sold Gross profit Less expenses Net Income (8 000) 44 000 31 000 21 000 10 000 The following list of balances was also provided: Capital Buildings Inventory Accounts payable ( Creditors) Cash Bank overdraft Accounts receivable ( Debtors) Motor vehicles 50 000 26 500 8 000 10 000 6 500 5 000 14 000 20 000 (a) Using the information given, calculate the following ratios: • Net income margin Return on capital invested Rate of turnover

Income Statement for the year ending 31 December 2012 Sales revenue 75 000 Beginning inventory Purchases 12 000 40 000 52 000 Less ending inventory Cost of goods sold Gross profit Less expenses Net Income (8 000) 44 000 31 000 21 000 10 000 The following list of balances was also provided: Capital Buildings Inventory Accounts payable ( Creditors) Cash Bank overdraft Accounts receivable ( Debtors) Motor vehicles 50 000 26 500 8 000 10 000 6 500 5 000 14 000 20 000 (a) Using the information given, calculate the following ratios: • Net income margin Return on capital invested Rate of turnover

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter12: Fainancial Statement Analysis

Section: Chapter Questions

Problem 59BE

See similar textbooks

Similar questions

Last year, Nikkola Company had net sales of 2,299,500,000 and cost of goods sold of 1,755,000,000. Nikkola had the following balances: Refer to the information for Nikkola Company above. Required: Note: Round answers to one decimal place. 1. Calculate the average inventory. 2. Calculate the inventory turnover ratio. 3. Calculate the inventory turnover in days. 4. CONCEPTUAL CONNECTION Based on these ratios, does Nikkola appear to be performing well or poorly?
Cost of goods sold and related items The following data were extracted from the accounting records of Harkins Company for the year ended April 30, 20Y8: Estimated returns of current year sales 11,600 Inventory, May 1, 20Y7 380,000 Inventory, April 30, 20Y8 415,000 Purchases 3,800,000 Purchases returns and allowances 150,000 Purchases discounts 80,000 Sales 5,850,000 Freight in 16,600 a. Prepare the Cost of goods sold section of the income statement for the year ended April 30, 20Y8, using the periodic inventory system. b. Determine the gross profit to be reported on the income statement for the year ended April 30, 20Y8. c. Would gross profit be different if the perpetual inventory system was used instead of the periodic inventory system?
Habicht Company was formed in 2018 to produce a single product. The production and sales for the next 4 years were as follows: Required: 1. Determine the gross profit for each year under each of the following periodic inventory methods: a. FIFO b. LIFO c. Average cost (Round unit costs to 3 decimal places.) 2. Next Level Explain whether the companys return on assets (net income divided by average total assets) would be higher under FIFO or LIFO.
Beginning inventory, purchases, and sales for WCS12 are as follows: Assuming a perpetual inventory system and using the weighted average method, determine (a) the weighted average unit cost after the October 22 purchase, (b) the cost of goods sold on October 29, and (c) the inventory on October 31.
Inventory analysis Costco Wholesale Corporation (COST) and Wal-Mart Stores Inc. (WMT) compete against each other in general merchandise retailing, gas stations, pharmacies, and optical centers. Below is selected financial information for both companies from a recent year's financial statements (in millions): a. Determine for bom companies (1) the inventory turnover and (2) the days' sales in inventory. Round to one decimal place. b. Compare and interpret the inventory metrics computed in (a).