A. Use the preceding financial statements to complete the following table. Assume that the industry averages given in the table are applicable for both 2002 and 2003. Thank you 89a. Use the preceding financial statements to complete the following table.Assume that the industry averages given in the table are applicable for bothCHAPTER 2 Financial Statements and AnalysisAssum preceding financial statements to complete the following table.2002 and 2003.IndustryaverigeRatioActial 2002Actual-2003Current ratio1.801.84Quick ratioInventory turnoverAverage collection periodDebt ratio0.700.782.502.5937 days36 days65%67%Times interest earned ratio3.84.0Gross profit marginNet profit marginReturn on total assets38%40%3.5%3.6%4.0%4.0%Return on common equityMarket/book ratio9.5%1.18.0%1.2"Based on a 360-day year and on end-of-year figures. 2-20 Financial statement analysis The financial statements of Zach Industries for theyear ended December 31, 2003, follow.KizaZach ladusticsfor the Year oded December 31,2003December 31, 2003Sales revenue$160,000$233SLess: Cost of goods sold000'901CashGross profits$ 54,00000SMarketable securitiesLess: Operating expensesAccounts receivable$ 16,00000000Selling expenseInventories45,500000'00000 0General and administrative expensesTotal current assetsLease expensepurBuildings and equipmentto000Depreciation expenseTotal operating expense$ 37,000Less: Accumulated depreciation38,000000 06,100Operating profitsNet fixed assets$ 78,000Less: Interést expenseTotal assetSNet profits before taxes4,360Liabilines and Stockliolderg FquityLess: TaxesNet profits after taxes%246,540Accounts payable$ 22,000Notes payableTotal current liabilities$ 22,950$ 31,500Long-term debtCommon stockRetained earnings2426,550Total liabilities and stockholders' equityThe firm's 3,000 outstanding shares of common stock closed2003 at a price of $25 per share.

Answered: Industry Average Ratio Actual 2003…

Industry Average Ratio Actual 2003 Actual 2002 Current ratio 1.80 1.84 Quick ratio Inventory turnover Average collection 0.70 0.78 2.50 2.59

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 83E

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