(PLEASE CONTINUE TO THE NEXT PAGE) TABLE 3 Ratio Industry Average Actual 2019 Actual 2020 Current Ratio 1.33 2.45 Quick (acid-Test) ratio 0.84 1.01 1.70 Inventory Turnover 13.67 12.74 Average Age of Inventory 26.69 28.66 Average Collecion Period 45.90 35.57 Total Assets Turnuver 49% 56% Price Earnings (P/E) Ratio 28.94 29.20 18.04 Times Interest Eamed Ratio 30.32 60.05 Debt Ratio 1.0905 18.89% 17.21% Gross Profit 39.98% 39.17% 40.19% Margin Operating Profit Margin 8,10% 11.89% Net Profit Margin 7.60 5.48% 8.19% Earnings Per Share 1.21 2.25 Return on Total Assets 2.71% 4.57% Return on Common Equity 24.80 3.31% 5.52% N.B. Healthy Foods Manufacturing Share Price as at 30" December 2019, $35.25 Healdıy Foods Munufacturing Share Price as at 30" December 2020, $40.50 a) Using time series analysis and industry averages assess Healthy Fonds Manufacturing Company Limited financial condition over the years 2019 and 2020 as it relates to the categories listed beluw. i. Liquidity ii. Activity iii. Debt iv. Profitability v. Market vi. Overall Financial Condition (Hint: For the time series analysis, you should compare the 2019 and 2020 ratios indicating whether the results "outperformed the prior yeur" ur "underperformed the prior year". You need to also provide a brief explanation on what may be responsible for the results. For the ratios with industry averages you should compare the ratios calculated in 2019 and 2020 to the industry average, and then state whether Healthy Foods Manufacturing may have "outperformed the industry" or "underperformed the industry". For the ratios without industry averages no comparison of industry average to company's performance can be performed. Finally, please ensure that a possible explanation for Healthy Fonds Manufacturing results is provided).
(PLEASE CONTINUE TO THE NEXT PAGE) TABLE 3 Ratio Industry Average Actual 2019 Actual 2020 Current Ratio 1.33 2.45 Quick (acid-Test) ratio 0.84 1.01 1.70 Inventory Turnover 13.67 12.74 Average Age of Inventory 26.69 28.66 Average Collecion Period 45.90 35.57 Total Assets Turnuver 49% 56% Price Earnings (P/E) Ratio 28.94 29.20 18.04 Times Interest Eamed Ratio 30.32 60.05 Debt Ratio 1.0905 18.89% 17.21% Gross Profit 39.98% 39.17% 40.19% Margin Operating Profit Margin 8,10% 11.89% Net Profit Margin 7.60 5.48% 8.19% Earnings Per Share 1.21 2.25 Return on Total Assets 2.71% 4.57% Return on Common Equity 24.80 3.31% 5.52% N.B. Healthy Foods Manufacturing Share Price as at 30" December 2019, $35.25 Healdıy Foods Munufacturing Share Price as at 30" December 2020, $40.50 a) Using time series analysis and industry averages assess Healthy Fonds Manufacturing Company Limited financial condition over the years 2019 and 2020 as it relates to the categories listed beluw. i. Liquidity ii. Activity iii. Debt iv. Profitability v. Market vi. Overall Financial Condition (Hint: For the time series analysis, you should compare the 2019 and 2020 ratios indicating whether the results "outperformed the prior yeur" ur "underperformed the prior year". You need to also provide a brief explanation on what may be responsible for the results. For the ratios with industry averages you should compare the ratios calculated in 2019 and 2020 to the industry average, and then state whether Healthy Foods Manufacturing may have "outperformed the industry" or "underperformed the industry". For the ratios without industry averages no comparison of industry average to company's performance can be performed. Finally, please ensure that a possible explanation for Healthy Fonds Manufacturing results is provided).
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter8: Inventories: Special Valuation Issues
Section: Chapter Questions
Problem 3P: Inventory Write-Down The inventory records of Frost Company for the years 2019 and 2020 reveal the...
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(PLEASE CONTINUE TO THE NEXT PAGE)
TABLE 3
Ratio
Industry
Average
Actual 2019
Actual 2020
Current Ratio
1.33
2.45
Quick (acid-Test) ratio
0.84
1.01
1.70
Inventory Turnover
13.67
12.74
Average Age of Inventory
26.69
28.66
Average Collection Period
45.90
35.57
Total Assets Turnuver
49%
56%
Price Earnings (P/E) Ratio
28.94
29.20
18.04
Times Interest Eamed Ratio
30.32
60.05
Debt Ratio
1.0905
18.89%
17.21%
Gross Profit
39.98%
39.17%
40.19%
Margin
Operating Profit Margin
8.10%
11.89%
Net Profit Margin
7.60
5.48%
8.19%
Earnings Per Share
1.21
2.25
Return on Total Assets
2.71%
4.57%
Return on Common Equity
24.80
3.31%
5.52%
N.B. Healthy Foods Manufacturing Share Price as at 30" December 2019, $35.25
Healthy Fuods Manufacturing Share Price as at 30" December 2020, $40.50
a) Using time series analysis and industry averages assess Healthy Foods Manufacturing
Company Limited financial condition over the years 2019 and 2020 as it relates to the
categories listeel beluw.
i. Liquidity
ii. Activity
iii. Debt
iv. Profitability
v. Market
vi. Overall Financial Condition
(Hint: For the time series analysis, you should compare the 2019 and 2020 ratios
indicating whether the results "outperformed the priur year" ur "underperformed the prior
year". You need to also provide a brief explanation on what may be responsible for the
results. For the ratios with industry averages you should compare the ratios calculated in
2019 and 2020 to the industry average, and then state whether Healthy Foods
Manufacturing may have "outperformed the industry" or "underperformed the industry".
For the ratios without industry averages no comparison of industry average to company's
performance can be performed. Finally, please ensure that a possible explanation for
Healthy Foods Manufacturing results is provided).
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