FINANCIAL ACCOUNTING
6th Edition
ISBN: 9781618533111
Author: DYCKMAN
Publisher: Cambridge Business Publishers
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Chapter 1, Problem 47CP
a.
To determine
Calculate the return on equity of Company G and company N for the year 2017.
b.
To determine
Calculate the debt-to equity ratio of Company G and company N for the year 2017.
c.
To determine
Prepare an income statement of Company G and Company N for the year 2017, and calculate the gross profit as a percentage of sales revenue.
d.
To determine
Compare company G and company N and indicate the factors that might cause the differences in the computed ratios.
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The Corrigan Corporation’s 2015 and 2016 financial statements follow,along with some industry average ratios.a. Assess Corrigan’s liquidity position, and determine how it compares with peers and how the liquidity position has changed over time.b. Assess Corrigan’s asset management position, and determine how it compares with peers and how its asset management efficiency has changed over time.c. Assess Corrigan’s debt management position, and determine how it compares with peers and how its debt management has changed over time.d. Assess Corrigan’s profitability ratios, and determine how they compare with peers and how its profitability position has changed over time.e. Assess Corrigan’s market value ratios, and determine how its valuation compares with peers and how it has changed over time.f. Calculate Corrigan’s ROE as well as the industry average ROE, using the DuPont equation. From this analysis, how does Corrigan’s financial position compare with the industry average numbers?g.…
Use Tableau to calculate and display the trends for the debt to equity and times interest earned ratios for each of the two companies in the period 2018-2021. the average debt to equity ratio and times interest earned ratio for companies in the General Retailers industry sector in a comparable time period are 1.92 and 10.6, respectively.
1. Other things being equal, do both companies appear to have the ability to meet their obligations as measured by the debt to equity ratio?
2. Based solely on the times interest earned ratios, do you reach the same conclusion as in Requirement 1?
3. Is the margin of safety provided to creditors by Discount Goods improving or declining in recent years as measured by the average times interest earned ratio?
The below tables shows Dynamic Mattress’s year-end 2016 and 2018 balance sheets, and its income statement for 2017.
Dynamic MattressYear-End Balance Sheet for 2016(figures in $ millions)
Assets
Liabilities and Shareholders’ Equity
Current Assets:
Current Liabilities:
Cash
$
22
Bank loans
$
22
Marketable securities
11
Accounts payable
80
Accounts receivable
111
Inventory
155
Total current assets
$
299
Total current liabilities
$
102
Fixed assets:
Gross investment
$
251
Long-term debt
26
Less depreciation
71
Net worth (equity and retained earnings)
351
Net fixed assets
$
180
Total assets
$
479
Total liabilities and net worth
$
479
Dynamic MattressYear-End Balance Sheet for 2017(figures in $ millions)
Assets
Liabilities and Shareholders’ Equity
Current Assets:
Current Liabilities:
Cash
$
32.0
Debt due within a year (bank…
Chapter 1 Solutions
FINANCIAL ACCOUNTING
Ch. 1 - Prob. 1MCCh. 1 - Prob. 2MCCh. 1 - Prob. 3MCCh. 1 - Prob. 4MCCh. 1 - Prob. 5MCCh. 1 - Prob. 1QCh. 1 - Prob. 2QCh. 1 - Prob. 3QCh. 1 - Prob. 4QCh. 1 - Prob. 5Q
Ch. 1 - Prob. 6QCh. 1 - Prob. 7QCh. 1 - Prob. 8QCh. 1 - Prob. 9QCh. 1 - Prob. 10QCh. 1 - Prob. 11QCh. 1 - Prob. 12QCh. 1 - Prob. 13QCh. 1 - Prob. 14QCh. 1 - Prob. 15QCh. 1 - Prob. 16QCh. 1 - Prob. 17QCh. 1 - Prob. 18QCh. 1 - Prob. 19MECh. 1 - Prob. 20MECh. 1 - Prob. 21MECh. 1 - Prob. 24MECh. 1 - Prob. 25MECh. 1 - Prob. 26MECh. 1 - Prob. 27ECh. 1 - Prob. 28ECh. 1 - Prob. 29ECh. 1 - Prob. 30ECh. 1 - Prob. 31ECh. 1 - Prob. 32ECh. 1 - Prob. 33ECh. 1 - Prob. 34ECh. 1 - Prob. 35ECh. 1 - Prob. 36PCh. 1 - Prob. 37PCh. 1 - Prob. 38PCh. 1 - Prob. 39PCh. 1 - Prob. 40PCh. 1 - Prob. 41PCh. 1 - Prob. 42PCh. 1 - Prob. 43PCh. 1 - Prob. 44PCh. 1 - Prob. 45PCh. 1 - Prob. 46CPCh. 1 - Prob. 47CPCh. 1 - Prob. 48CPCh. 1 - Prob. 49CPCh. 1 - Prob. 50CP
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