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tions of ratios. one paragraph. 3A. Comparison between 2020E and 2019 ratios - (a) Liquidity ratios (1) What happened? Did each of the ratios increase, decrease, or not change? (2) What had caused the movement or non-movement for each ratio? and (3) Is this a good thing or a bad thing for the company? (b) Solvency ratios (1) What happened? Did each of the ratios increase, decr

tions of ratios. one paragraph. 3A. Comparison between 2020E and 2019 ratios - (a) Liquidity ratios (1) What happened? Did each of the ratios increase, decrease, or not change? (2) What had caused the movement or non-movement for each ratio? and (3) Is this a good thing or a bad thing for the company? (b) Solvency ratios (1) What happened? Did each of the ratios increase, decr

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Compose a financial analysis based on your evaluation of the ratios. For EACH of the five (5) classifications of ratios. one paragraph.

3A. Comparison between 2020E and 2019 ratios -

(a) Liquidity ratios

(1) What happened? Did each of the ratios increase, decrease, or not change?

(2) What had caused the movement or non-movement for each ratio? and

(3) Is this a good thing or a bad thing for the company?

(b) Solvency ratios

(1) What happened? Did each of the ratios increase, decrease, or not change?

(2) What had caused the movement or non-movement for each ratio? and

(3) Is this a good thing or a bad thing for the company?

(c) Asset utilization ratios

(1) What happened? Did each of the ratios increase, decrease, or not change?

(2) What had caused the movement or non-movement for each ratio? and

(3) Is this a good thing or a bad thing for the company?

(d) Profitability ratios

(1) What happened? Did each of the ratios increase, decrease, or not change?

(2) What had caused the movement or non-movement for each ratio? and

(3) Is this a good thing or a bad thing for the company?

(e) Market performance ratios)

(1) What happened? Did each of the ratios increase, decrease, or not change?

(2) What had caused the movement or non-movement for each ratio? and

(3) Is this a good thing or a bad thing for the company?

ABC Corporation Table 1 Balance Sheets 2020E 2019 2018 Assets 85,632 P 878,000 Cash 7,282 P 57,600 Accounts receivable 632,160 351,200 DInventories |Total current assets 2Gross fixed assets B Less: accumulated depreciation 4Net fixed assets 5 Total assets 1,716,480 1,287,360 1,926,802 P 1,202,950 263,160 939,790 P 2,866,592 P 715,200 2,680,112 P 1,124,000 1,197,160 491,000 380,120 817,040 P 3,497,152 P 146,200 344,800 1,468,800 P - Liabilities and equity B Accounts payable e Accruals DNotes payable |Total current liabilities e Long-term bonds 3 Common stock (100,000 shares) a Retained earnings 5 Total common equity 5 Total liabilities and equity 436,800 P 524,160 P 145,600 408,000 489,600 136,000 300,000 1,144,800 P 400,000 636,808 200,000 481,600 1,650,568 P 723,432 323,432 1,721,176 460,000 460,000 231,176 32,592 203,768 1,952,352 P 492,592 2,866,592 P 663,768 1,468,800 3,497,152 P 3 Table 2 Income Statements 2020E 2019 2018 DSales 7,035,600 P 5,875,992 1,159,608 6,034,000 P 5,528,000 506,000 3,432,000 2,864,000 568,000 Cost of goods sold e Gross income 3 Operating expenses except depreciation and amortization A EBITDA 5 Depreciation and amortization 5Earnings before interest and taxes (EBIT) - Interest expense 3 Earnings before taxes (EBT) e Taxes (40%) 358,672 209,328 550,000 519,988 (13,988) P 116,960 (130,948) P 136,012 (266,960) P (106,784) (160,176) P 609,608 P 116,960 18,900 190,428 492,648 P 70,008 422,640 P 43,828 146,600 Pagé 189,056 253,584 P 58,640 87,960 DNet Incone
Transcribed Image Text:ABC Corporation Table 1 Balance Sheets 2020E 2019 2018 Assets 85,632 P 878,000 Cash 7,282 P 57,600 Accounts receivable 632,160 351,200 DInventories |Total current assets 2Gross fixed assets B Less: accumulated depreciation 4Net fixed assets 5 Total assets 1,716,480 1,287,360 1,926,802 P 1,202,950 263,160 939,790 P 2,866,592 P 715,200 2,680,112 P 1,124,000 1,197,160 491,000 380,120 817,040 P 3,497,152 P 146,200 344,800 1,468,800 P - Liabilities and equity B Accounts payable e Accruals DNotes payable |Total current liabilities e Long-term bonds 3 Common stock (100,000 shares) a Retained earnings 5 Total common equity 5 Total liabilities and equity 436,800 P 524,160 P 145,600 408,000 489,600 136,000 300,000 1,144,800 P 400,000 636,808 200,000 481,600 1,650,568 P 723,432 323,432 1,721,176 460,000 460,000 231,176 32,592 203,768 1,952,352 P 492,592 2,866,592 P 663,768 1,468,800 3,497,152 P 3 Table 2 Income Statements 2020E 2019 2018 DSales 7,035,600 P 5,875,992 1,159,608 6,034,000 P 5,528,000 506,000 3,432,000 2,864,000 568,000 Cost of goods sold e Gross income 3 Operating expenses except depreciation and amortization A EBITDA 5 Depreciation and amortization 5Earnings before interest and taxes (EBIT) - Interest expense 3 Earnings before taxes (EBT) e Taxes (40%) 358,672 209,328 550,000 519,988 (13,988) P 116,960 (130,948) P 136,012 (266,960) P (106,784) (160,176) P 609,608 P 116,960 18,900 190,428 492,648 P 70,008 422,640 P 43,828 146,600 Pagé 189,056 253,584 P 58,640 87,960 DNet Incone
061 B E F 48 2020E 2019 Average 49 50 Current ratio Quick ratio 52 Cash ratio 53 Debt ratio 54 Equity ratio 55 Debt-to-equity (D/E) ratio 56 Equity multiplier Times interest earned (TIE) ratio 58 Dividend pagout ratio 59 Inventorg turnover 60 Days sales in inventorg Accounts receivable turnover 62 Days sales outstanding 63 Accounts pagable turnover 64 Days pagable outstanding 65 Operating eyele 66 Cash conversion cycle 67 Fized asset turnover 68 Total asset turnover 69 Gross margin 70 Operating margin Profit margin 72 Return on assets (ROA) 73 Return on equity (ROE) 74 Basic earning pover (BEP) 75 Basic earnings per share (EPS) 76 Price-to-earnings (PIE) ratio 77 Dividend gield 78 Market/book (MIB) 79 Book value per share (BYPS) 2.34 1.17 2.70 51 0.84 0.39 1.00 0.07 0.00 0.40 44.17% 55.83% 82.82% 60.00% 17.18% 40.00% 79.13% 481.94% 150.00% 260.28% 374.92% 200.00% 57 7.04 -0.96 6.20 0.22 -0.07 8.65 3.91 5.52 6.10 93.30 66.11 59.84 61 9.32 12.27 11.41 39.17 29.74 32.00 13.12 18.22 15.23 27.81 20.04 23.97 132.47 95.85 91.84 104.65 75.82 67.87 8.01 9.39 7.00 2.21 2.78 2.60 16.48% 8.39% 17.00% 7.00% -2.17% 7.30% 71 3.60% -2.65% 3.50% 7.97% -7.39% 9.10% 20.74% -27.70% 18.20% -6.04% 19.10% 1.45 -1.60 1.16 8.40 -1.40 14.20 0.05 0.61 1.56 0.46 2.40 7.81 4.93 n.a.
Transcribed Image Text:061 B E F 48 2020E 2019 Average 49 50 Current ratio Quick ratio 52 Cash ratio 53 Debt ratio 54 Equity ratio 55 Debt-to-equity (D/E) ratio 56 Equity multiplier Times interest earned (TIE) ratio 58 Dividend pagout ratio 59 Inventorg turnover 60 Days sales in inventorg Accounts receivable turnover 62 Days sales outstanding 63 Accounts pagable turnover 64 Days pagable outstanding 65 Operating eyele 66 Cash conversion cycle 67 Fized asset turnover 68 Total asset turnover 69 Gross margin 70 Operating margin Profit margin 72 Return on assets (ROA) 73 Return on equity (ROE) 74 Basic earning pover (BEP) 75 Basic earnings per share (EPS) 76 Price-to-earnings (PIE) ratio 77 Dividend gield 78 Market/book (MIB) 79 Book value per share (BYPS) 2.34 1.17 2.70 51 0.84 0.39 1.00 0.07 0.00 0.40 44.17% 55.83% 82.82% 60.00% 17.18% 40.00% 79.13% 481.94% 150.00% 260.28% 374.92% 200.00% 57 7.04 -0.96 6.20 0.22 -0.07 8.65 3.91 5.52 6.10 93.30 66.11 59.84 61 9.32 12.27 11.41 39.17 29.74 32.00 13.12 18.22 15.23 27.81 20.04 23.97 132.47 95.85 91.84 104.65 75.82 67.87 8.01 9.39 7.00 2.21 2.78 2.60 16.48% 8.39% 17.00% 7.00% -2.17% 7.30% 71 3.60% -2.65% 3.50% 7.97% -7.39% 9.10% 20.74% -27.70% 18.20% -6.04% 19.10% 1.45 -1.60 1.16 8.40 -1.40 14.20 0.05 0.61 1.56 0.46 2.40 7.81 4.93 n.a.
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