The initial analysis should include the following:The ratio equationThe calculation of the ratio using the equation with the financial data from the two assigned companies.Use the result in a sentence; i.e. For every dollar invested in assets the company is earning 22.4 cents or 22.4% in net income. Then explain whether this is a good result or a result that needs improving.The original post should include at least three (3) sentences but no more than seven (7) sentences. Page 422QS 11-12 Times interest earned A10Park Company reports interest expense of $145,000 and income before interest expense and income taxesof $1,885,000. (1) Compute its times interest earned. (2) Park's competitor's times interest earned is 4.0. IsPark in a better or worse position than its competitor to make interest payments if the economy turns bad?

Times-interest-earned ratio: The time interest earned ratio aids in determining the company's…

tial analysis should include the following: The ratio equation The calculation of the ratio using the equation with the financial data from the two assigned companies. Use the result in a sentence; i.e. For every dollar invested in assets the company is earning 22.4 cents or 22.4% in net income. Then explain whether this is a good result o

tial analysis should include the following: The ratio equation The calculation of the ratio using the equation with the financial data from the two assigned companies. Use the result in a sentence; i.e. For every dollar invested in assets the company is earning 22.4 cents or 22.4% in net income. Then explain whether this is a good result o

Corporate Financial Accounting

14th Edition

ISBN:9781305653535

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter14: Financial Statement Analysis

Section: Chapter Questions

Problem 14.7BE

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Current liabilities Bon Nebo Co. sold 25,000 annual subscriptions of Bjorn for 85 during December 20Y5. These new subscribers will receive monthly issues, beginning in January 20Y6. In addition, the business had taxable income of 840,000 during the first calendar quarter of 20Y6. The federal tax rate is 40%. A quarterly tax payment will be made on April 12, 20Y6. Prepare the current liabilities section of the balance sheet for Bon Nebo Co. on March 31, 20Y6.
Q4 : ( A ) Assume that The average monthly sales of company ( x ) is $ ( 45000 ) and The average monthly receivable account is $ ( 10000 ) Days , sales outstanding Find the days , sales outstanding
Interest Expense $ 173,751 $ 214,824 $ 237,025Earnings Before Taxes 1,459,141 1,356,595 1,155,894a. Determine the times interest earned ratio for Staples in Year 3, Year 2, and Year 1?b. Evaluate the ratio for Staples.
17-5 RECEIVABLES INVESTMENT McDowell Industries sells on terms of 3/10, net 30. Total sales for the year are $912,500; 40% of the customers pay on the 10th day and take discounts, while the other 60% pay, on average, 40 days after their purchases. What is the days sales outstanding? What is the average amount of receivables? What is the percentage cost of trade credit to customers who take the discount? What is the percentage cost of trade credit to customers who do not take the discount and pay in 40 days?
Entity B's current sales on credit: 28,240Collection period: 3 monthsMarket interest rate: 25%The company is considering to apply the 6/7 net 30 policy due to the excessive competition in the sector. It is estimated that 45% of customers can take advantage of this situation and the collection period will be reduced to 1.5 months. 1) What is the additional cost of the cash discount to the firm?a) 1,212,1b) 1,199.9c) 2,666.4d) 762.5e) 856.7 2) What is the additional benefit of the cash discount? 3) Should the entity apply the cash discount or not?
Question no. 1: McDowell Industries sells on terms of 4/10, net 40. Total sales for the year are $825,500. Thirty percent of customers pay on the 15th day and take discounts; the other 70% pay, on average, 60 days after their purchases. What is the days sales outstanding? What is the average amount of receivables? What would happen to average receivables if McDowell toughened its collection policy with the result that all non-discount customers paid on the 40th day? Question no.2: International Industries sells on terms of 3/10, net 50. Gross sales last year were 5,662,500 and accounts receivable averaged 547,500. Half of International’s customers paid on the 15th day and took discounts. What are the nominal and effective costs of trade credit to International’s non-discount customers? (Hint: Calculate sales/day based on a 360-day year, then calculate average receivables of discount customers and then find the DSO for the non-discount customers. Question no.3: The D.J. Masson…