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Use the information in the table below to calculate the following ratios for Windswept Woodworks for year 1 and year 2. Windswept Woodworks, Incorporated Input Data (millions of dollars) Year 2 Year 1 Accounts payable Accounts receivable Accumulated depreciation Cash & equivalents Common stock Cost of goods sold Depreciation expense Common stock dividends paid Interest expense Inventory Addition to retained earnings Long-term debt Notes payable Gross plant & equipment Retained earnings 542 1,386 6,852 330 474 920 6,722 218 1,210 1,290 1,510 n.a. n.a. n.a. 150 1,120 602 918 n.a. 1,116 n.a. 826 390 10,040 2,566 240 10,300 3,168 3,028 126 21% $ 19.80 500 million Sales n.a. Other current liabilities Tax rate Market price per share - year end Number of shares outstanding 106 n.a. $ 17.50 500 million (For all requirements, round your answers to 2 decimal places.) Required: a. Interest coverage ratio (Assume that year 1 EBIT was 1,307 and year 1 interest expense was 120.) Answer is complete and correct. Year 2 interest coverage ratio Year 1 interest coverage ratio 9.25 10.89 O b. Averege collection period (Assume that the accounts receivable balence was 960 on December 31 of the previous year and that year 1 sales were 2,728.) (Use 365 days in a year.)

Use the information in the table below to calculate the following ratios for Windswept Woodworks for year 1 and year 2. Windswept Woodworks, Incorporated Input Data (millions of dollars) Year 2 Year 1 Accounts payable Accounts receivable Accumulated depreciation Cash & equivalents Common stock Cost of goods sold Depreciation expense Common stock dividends paid Interest expense Inventory Addition to retained earnings Long-term debt Notes payable Gross plant & equipment Retained earnings 542 1,386 6,852 330 474 920 6,722 218 1,210 1,290 1,510 n.a. n.a. n.a. 150 1,120 602 918 n.a. 1,116 n.a. 826 390 10,040 2,566 240 10,300 3,168 3,028 126 21% $ 19.80 500 million Sales n.a. Other current liabilities Tax rate Market price per share - year end Number of shares outstanding 106 n.a. $ 17.50 500 million (For all requirements, round your answers to 2 decimal places.) Required: a. Interest coverage ratio (Assume that year 1 EBIT was 1,307 and year 1 interest expense was 120.) Answer is complete and correct. Year 2 interest coverage ratio Year 1 interest coverage ratio 9.25 10.89 O b. Averege collection period (Assume that the accounts receivable balence was 960 on December 31 of the previous year and that year 1 sales were 2,728.) (Use 365 days in a year.)

Century 21 Accounting Multicolumn Journal
Century 21 Accounting Multicolumn Journal
11th Edition
ISBN:9781337679503
Author:Gilbertson
Publisher:Gilbertson
Chapter17: Financial Statement Analysis
Section: Chapter Questions
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Use the information in the table below to calculate the following ratios for Windswept Woodworks for year 1 and year 2. Windswept woodworks, Incorporated Input Data (millions of dollars) Year 2 Year 1 Accounts payable Accounts receivable Accumulated depreciation Cash & equivalents Common stock Cost of goods sold Depreciation expense Common stock dividends paid Interest expense Inventory Addition to retained earnings Long-term debt Notes payable Gross plant & equipment Retained earnings 542 474 1,386 6,852 330 920 6,722 218 1,290 1,510 1,210 n.a. n.a. n.a. 150 1,120 602 918 n.a. 1,116 n.a. 826 240 10,300 3,168 3,028 126 21% $ 19.80 500 million 390 10,040 2,566 Sales n.a. Other current liabilities Tax rate Market price per share - year end Number of shares outstanding 106 n.a. $ 17.50 500 million (For all requirements, round your answers to 2 decimal places.) Required: e. Interest coverage ratio (Assume that year 1 EBIT was 1,307 and year 1 interest expense was 120.) Answer is complete and correct. Year 2 interest coverage ratio 9.25 O Year 1 interest coverage ratio 10.89 b. Averege collection period (Assume that the occounts receivable bolonce was 960 on December 31 of the previous yeor and thot year 1 sales were 2,728.) (Use 365 days in a year.)
Transcribed Image Text:Use the information in the table below to calculate the following ratios for Windswept Woodworks for year 1 and year 2. Windswept woodworks, Incorporated Input Data (millions of dollars) Year 2 Year 1 Accounts payable Accounts receivable Accumulated depreciation Cash & equivalents Common stock Cost of goods sold Depreciation expense Common stock dividends paid Interest expense Inventory Addition to retained earnings Long-term debt Notes payable Gross plant & equipment Retained earnings 542 474 1,386 6,852 330 920 6,722 218 1,290 1,510 1,210 n.a. n.a. n.a. 150 1,120 602 918 n.a. 1,116 n.a. 826 240 10,300 3,168 3,028 126 21% $ 19.80 500 million 390 10,040 2,566 Sales n.a. Other current liabilities Tax rate Market price per share - year end Number of shares outstanding 106 n.a. $ 17.50 500 million (For all requirements, round your answers to 2 decimal places.) Required: e. Interest coverage ratio (Assume that year 1 EBIT was 1,307 and year 1 interest expense was 120.) Answer is complete and correct. Year 2 interest coverage ratio 9.25 O Year 1 interest coverage ratio 10.89 b. Averege collection period (Assume that the occounts receivable bolonce was 960 on December 31 of the previous yeor and thot year 1 sales were 2,728.) (Use 365 days in a year.)
b. Average collection period (Assume that the accounts receivable balance was 960 on December 31 of the previous year and that year 1 sales were 2,728.) (Use 365 days in a year.) Answer is complete and correct. 138.98 Year 2 ACP Year 1 ACP days 125.77 O days c. Current ratio O Answer is complete but not entirely correct. Year 2 current ratio Year 1 current ratio 4.25 8 3.89 O d. Quick ratio Answer is complete but not entirely correct. Year 2 quick ratio Year 1 quick ratio 2.57 X 1.96 0
Transcribed Image Text:b. Average collection period (Assume that the accounts receivable balance was 960 on December 31 of the previous year and that year 1 sales were 2,728.) (Use 365 days in a year.) Answer is complete and correct. 138.98 Year 2 ACP Year 1 ACP days 125.77 O days c. Current ratio O Answer is complete but not entirely correct. Year 2 current ratio Year 1 current ratio 4.25 8 3.89 O d. Quick ratio Answer is complete but not entirely correct. Year 2 quick ratio Year 1 quick ratio 2.57 X 1.96 0
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