napter 4 - Part 1)Using the financial statements provided below for ABC Manufacturing Company, calculate all theratios listed below for both 2020 and 2021. Assume that all sales are credit sales.(a) Calculate the ratios for ABC Manufacturing Company for 2020 and 2021.(b) Put an "I/D" beside the Year 2021 ratio calculation if the ratio has Improved/Deteriorated.Put an "S"/"W" beside the Year 2021 ratio if ABC Manufacturing Company's ratio is StrongeriWeaker than its competitors.

Current Ratio = Current AssetCurrent Liabilities Liquid Ratio = Current Assets - InventoryCurrent…

Answered: napter 4 - Part 1) Using the financial…

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter5: Sales And Receivables

Section: Chapter Questions

Problem 87APSA

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Ratio Analysis The following information was taken from Logsden Manufacturings trial balances as of December 31, 2018, and December 31, 2019. Required: 1. Calculate the gross profit margin and operating margin percentage for 2019. ( Note: Round answers to two decimal places.) 2. Assuming that all of the operating expenses are fixed (or, wont change as sales increase or decrease), what will be the operating margin percentage if sales increase by 25%?
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.
1.Calculate the break‐even point for Pearson & Litt for 2019 and 2020. 2. Compare the results of the 2019 and 2020 break‐even point and explain why there might be a difference. 3. The current ratio reflects the relationship between the value of the current assets and the extent of the current liabilities of a business. 4. Calculate the current ratio for Pearson & Litt for 2019. 5. Explain the results of the current‐test ratio. HINT: Include the minimum ratio recommended for the ratio in your answer. 6. The gross profit margin indicates how profitable sales have been. 7. Calculate the gross profit margin for Pearson & Litt for 2020. 8. Explain the results of the gross profit margin calculation. 9. Financial planning forms an integral part of the strategic planning of a firm. 10. Differentiate between traditional budgeting and zero‐base budgeting. 11. Recommend one of these budgeting methods to Pearson & Litt and provide reasons for your recommendation.
Question 2 Alex is currently considering to invest his money in one of the companies between Company A and Company B. The summarized final accounts of the companies for their last completed financial year are as follows: Refer to the pic attached. Based on the pic, Required: Calculate the following ratios for Company A and Company B. State clearly the formulae used for each ratio: Gross Profit Margin Net Profit Margin Inventory Turnover Period (days) Receivables Collection Period (days) Payables Payment Period (days) Current Ratio Quick Ratio b. Comment on each of the ratios calculated in part (a) above.
Use this data to compute the following ratios: 1.Current ratio (Dec 2020 )2.Acid-test Ratio (Dec 2020) 3.Accounts Receivable Turnover 4.Inventory Turnover 5.Return on Assets 6.Profit Margin on Sales 7.Return on Equity 8.Times Interest Earned b.Discuss the financial condition of ABC Company, Inc. based on what you learn from computing the ratios.
1. Compute the following ratios for the comparative periods (2018 and 2019). The company used 365 days in its computation for some of the ratios. Show your solution. d. Accounts Receivable Turnover Ratio e. Average Collection Period f. Inventory Turnover Ratio g. Average Days in Inventory h. Number of days in Operating Cycle i. Debt to Total Assets Ratio j. Debt to Equity Ratio k. Times Interest Earned Ratio l. Gross Profit Ratio m. Profit Margin Ratio n. Return on Assets o. Return on Equity p. Assets Turnover Ratio
Solve and perform the different financial ratios using the financial statements of XYZ Company for the year 2021. 1. Current Ratio 2. Quick Ratio 3. Receivables Turnover 4. Inventory Turnover 5. Debt Ratio 6. Equity Ratio 7. Times Interest Earned 8. Gross Profit Margin 9. Operating Profit Margin 10. Net Profit Margin
1. Compute the following ratios for the comparative periods (2018 and 2019). The company used 365 days in its computation for some of the ratios. Show your solution. a. Working Capital b. Current Ratio c. Acid Test Ratio d. Accounts Receivable Turnover Ratio e. Average Collection Period f. Inventory Turnover Ratio g. Average Days in Inventory h. Number of days in Operating Cycle i. Debt to Total Assets Ratio j. Debt to Equity Ratio k. Times Interest Earned Ratio l. Gross Profit Ratio m. Profit Margin Ratio n. Return on Assets o. Return on Equity p. Assets Turnover Ratio
Question 2 Alex is currently considering to invest his money in one of the companies between Company A and Company B. The summarized final accounts of the companies for their last completed financial year are as follows: Refer to the pic attached. Based on the pic, Part (a) Gross Profit Margin Net Profit Margin Inventory Turnover Period (days) Receivables Collection Period (days) Payables Payment Period (days) Current Ratio Quick Ratio Required: b. Comment on each of the ratios calculated in part (a) above.
Using the financial statements provided below for ABC Manufacturing Company, calculate all the ratios listed below for both 2020 and2021. Assume that all sales are credit sales. (a) Calculate the ratios forABC Manufacturing Company for2020 and 2021. (b)Put an“I/D” beside the Year 2021 ratio calculation if the ratio has Improved/Deteriorated. Putan“S”/“W” beside the Year 2021 ratio if ABC Manufacturing Company’s ratio is Stronger/Weake rthan its competitors
Calculate the following ratios for 2021. Express answers to two decimal places. 4.1.1 Gross margin 4.1.2 Inventory turnover 4.1.3 Acid test ratio 4.1.4 Debt to equity 4.1.5 Earnings per share 4.2 Are the collections from credit sales satisfactory? Motivate your answer by using the relevant ratio. 4.3 Would the shareholders of Harmony Limited be satisfied with the return on their investments? Motivate your answer with the use of a relevant ratio. 4.4 Suggest THREE (3) ways in which Harmony Limited can improve its gross margin ratio, without increasing the selling price of the inventories.
Please answer only to question b) ( but please, don't copy from any other answer , I would like to hear new anlysis) Ratios calculations and Financial statements are below: Anne's business for October 2021 Net profit Margin = net profit/sales = (210)/5600 = - 3.75% Gross profit margin = gross profit/sales = 770/5600 = 13.75% Current ratio= current assets/current liability= 15,840/5,150= 3.08 Acid test ratio = (cash+ accounts receivable) / current liability = (7,340+8030+150)/5,150 = 3.02 Accounts receivable collection period = Receivables / Average daily credit sales = 150/ (5600/360 days) = 9.64 days or 10 days Accounts payable payment period = Accounts Payable / Average daily purchases = (5,150/ (5,150/360 days) = 360 days

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