QUESTION 7Р18.3АP18.ЗА (LO 3)Jergan Corporation are presented here.Perform ratio analysis, and discuss changes in financial position and operating results.Jergan CorporationCondensed balance sheet and income statement data forBalance SheetsDecember 31202020192018Cash$ 30,000$ 20,000$ 18,000Accounts receivable (net)50,00045,00048,000Other current assets90,00095,00064,000Investments55,00070,00045,000Plant and equipment (net)500,000370,000358,000$725,000$600,000$533,000Current liabilities$ 85,000$ 80,000$ 70,000Long-term debtCommon stock, $10 par145,00085,00050,000320,000310,000300,000Retained earnings175,000125,000113,000$725,000$600,000$533,000Jergan CorporationIncome StatementsFor the Years Ended December 3120202019Sales revenue$740,000$600,000Less: Sales returns and allowances40,00030,000Net sales700,000570,000Cost of goods soldGross profit425,000350,000275,000220,000Operating expenses (including income taxes)180,000150,000Net income$ 95,000$ 70,000Additional information:1. The market price of Jergan's common stock was $7.00, $7.50, and $8.50 for 2018, 2019,and 2020, respectively.2. You must compute dividends paid. All dividends were paid in cash.Instructionsa. Compute the following ratios for 2019 and 2020.•1. Profit margin.• 2. Gross profit rate.•3. Asset turnover.•4. Earnings per share.•5. Price-earnings ratio.•6. Payout ratio.•7. Debt to assets ratio.b. Based on the ratios calculated, discuss briefly the improvement or lack thereof in thefinancial position and operating results from 2019 to 2020 of Jergan Corporation.QUESTION 8Р18-5AP14.5A (LO 3)are presented here (in millions)Suppose selected financial data of Target and Wal-Mart for 2020 QUESTION 8P18-5AР14.5A (LO 3)are presented here (in millions).Compute selected ratios, and compare liquidity, profitability, and solvency for twoсоmpanies.Suppose selected financial data of Target and Wal-Mart for 2020Wal-MartTargetCorporation Stores, Inc.Income Statement Data for YearNet sales$65,357$408,214Cost of goods soldSelling and administrative expenses45,583304,65715,10179,607TargetCorporation Stores, Inc.Wal-MartInterest expense7072,065Other income (expense)(94)(411)Income tax eхрense1,3847,139$ 2,488Balance Sheet Data (End of Year)Net income$ 14,335Current assets$18,424$ 48,331Noncurrent assets26,109122,375Total assets$44,533$170,706Current liabilities$11,327$ 55,561Long-term debtTotal stockholders' equity17,85944,08915,34771,056Total liabilities and stockholders' equity$44,533$170,706Beginning-of-Year BalancesTotal assets$44,106$163,429Total stockholders' equity13,71265,682Current liabilities10,51255,390Total liabilities30,39497,747Other DataAverage net accounts receivableAverage inventoryNet cash provided by operating activities 5,881$ 7,525$ 4,0256,94233,83626,249Capital expenditures1,72912,184Dividends4964,217Instructionsa. For each company, compute the following ratios.•1. Current ratio.•2. Accounts receivable turnover.•3. Average collection period.•4. Inventory turnover.•5. Days in inventory.•6. Profit margin.•7. Asset turnover.•8. Return on assets.•9. Return on common stockholders' equity.• 10. Debt to assets ratio.• 11. Times interest earned.• 12. Free cash flow.b. Compare the liquidity, solvency, and profitability of the two companies.

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QUESTION 7 P18.3А P18.3A (LO 3) Jergan Corporation are presented here. Perform ratio analysis, and discuss changes in financial position and operating results. Jergan Corporation Condensed balance sheet and income statement data for Balance Sheets December 31 2020 2019 2018 Cash $ 30,000 $ 20,000 $ 18,000 Accounts receivable (net) 50,000 45,000 48,000 Other current assets 90,000 95,000 64,000 Investments 55,000 70,000 45,000 Plant and equipment (net) 500,000 370,000 358,000 $725,000 $600,000 $533,000 Current liabilities $ 85,000 $ 80,000 $ 70,000 Long-term debt Common stock, $10 par 145,000 85,000 50,000 320,000 310,000 300,000 Retained earnings 175,000 125,000 113,000 $725,000 $600,000 $533,000 Jergan Corporation Income Statements For the Years Ended December 31 2020 2019 Sales revenue $740,000 $600,000 Less: Sales returns and allowances 40,000 30,000 Net sales 700,000 570,000 Cost of goods sold Gross profit 425,000 350,000 275,000 220,000 Operating expenses (including income taxes) 180,000 150,000 Net income $ 95,000 $ 70,000 Additional information: 1. The market price of Jergan's common stock was $7.00, $7.50, and $8.50 for 2018, 2019, and 2020, respectively. 2. You must compute dividends paid. All dividends were paid in cash. Instructions a. Compute the following ratios for 2019 and 2020. •1. Profit margin. •2. Gross profit rate. •3. Asset turnover. •4. Earnings per share. •5. Price-earnings ratio. •6. Payout ratio. •7. Debt to assets ratio. b. Based on the ratios calculated, discuss briefly the improvement or lack thereof in the financial position and operating results from 2019 to 2020 of Jergan Corporation.

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter9: Metric-analysis Of Financial Statements

Section: Chapter Questions

Problem 9.4.10P: Twenty metrics of liquidity, solvency, and profitability The comparative financial statements of...