FINANCIAL ACCT LL W/ACCESS
4th Edition
ISBN: 9781260732948
Author: SPICELAND
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Question
Chapter 11, Problem 11.12E
Requirement – 1
To determine
Return on total Assets:
It is a measure to evaluate the efficiency of company’s assets. It reports the profit earned as the percentage of total assets used in the business. A company’s
The formula to compute return on asset:
To calculate: The return on assets of Company Z.
Requirement – 2
To determine
Cash return on assets:
It refers to the rate of cash generated from the investments in assets of company. It is relationship between the cash flows from operating activities and average total assets.
The formula to compute cash return on assets:
To calculate: The cash return on assets of Company Z.
Requirement – 3
To determine
Cash flows to sales:
It measures the cash generated from operating activities for each dollar of sales.
The formula to compute cash return on assets
Assets Turnover:
It’s a measure to evaluate the efficiency of total assets used in the business to generate sales during a certain period. Assets turnover reflects the net sales as the times of average total assets.
The formula to compute asset turnover
To calculate: The cash flow to sales ratio and asset turnover ratio of Company Z:
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Tabor Company has just prepared the following comparative annual financial statements for the current year:
TABOR COMPANY
Comparative Income Statement
For the Years Ended December 31
Sales revenue (one-half on credit)
Cost of goods sold.
Gross profit
Expenses (including $7,200 interest expense each year).
Pretax income
Income tax expense (30%)
Net income
Assets
Cash
Accounts receivable
Inventory
Property & equipment (net)
Total assets
Liabilities
Accounts payable
Income taxes payable
Note payable, long-term
Stockholders' equity
TABOR COMPANY
Comparative Balance Sheet
At December 31
Capital stock ($5 par value)
Retained earnings
Total liabilities and stockholders' equity
Current Year Prior Year
$ 198,000
$ 257,400
93,600
124,800
132,600
96,200
36,400
10,920
$ 25,480
104,400
72,000
32,400
9,720
$ 22,680
Current Year
$ 51,100
61,000
28,200
103,000
$ 243,300
$ 43,400
2,600
56,000
98,000
43,300
$ 243,300
Prior Year
$ 39,600
40,000
44,400
121,000
$ 245,000
$ 46,200
1,300
56,000
106,000…
use the information in the income statement below to calculate operating cash flow (OCF).
sales- $1,280
COGS- $620
Dep Exp- $180
EBIT- $480
Int Exp- $110
EBT- $370
Taxes- $78
NI- $292
Calculating ROA Using the Dupont Financial System. The following Accounts are included in Marks financial statements:Cash $15,000, Revenue 2,200,000, Current assets $400,000, Prepaid expenses $43,500 Non-current assets $1,500,000, Trade receivables $157,000, Depreciation/amortization $25,000, Cost of sales $1,700,000, Distribution costs $165,000
Chapter 11 Solutions
FINANCIAL ACCT LL W/ACCESS
Ch. 11 - 1.Identify and briefly describe the three...Ch. 11 - Prob. 2RQCh. 11 - Explain what we mean by noncash activities and...Ch. 11 - Why is it necessary to use an income statement,...Ch. 11 - Prob. 5RQCh. 11 - Prob. 6RQCh. 11 - Distinguish between the indirect method and the...Ch. 11 - Prob. 8RQCh. 11 - Prob. 9RQCh. 11 - 10.Explain how we report depreciation expense in...
Ch. 11 - Describe how we report a gain or loss on the sale...Ch. 11 - Prob. 12RQCh. 11 - Prob. 13RQCh. 11 - Prob. 14RQCh. 11 - Prob. 15RQCh. 11 - Prob. 16RQCh. 11 - Prob. 17RQCh. 11 - Prob. 18RQCh. 11 - Prob. 19RQCh. 11 - 20.Why do we exclude depreciation expense and the...Ch. 11 - Classify each of the following items as an...Ch. 11 - Prob. 11.2BECh. 11 - Prob. 11.3BECh. 11 - Prob. 11.4BECh. 11 - Prob. 11.5BECh. 11 - Prob. 11.6BECh. 11 - Prob. 11.7BECh. 11 - Creative Sound Systems sold investments, land, and...Ch. 11 - Prob. 11.9BECh. 11 - Prob. 11.10BECh. 11 - Prob. 11.11BECh. 11 - Prob. 11.12BECh. 11 - Electronic Superstores inventory increases during...Ch. 11 - Prob. 11.14BECh. 11 - Computer World reports income tax expense of...Ch. 11 - Prob. 11.1ECh. 11 - Prob. 11.2ECh. 11 - Determine proper classification (LO111) Analysis...Ch. 11 - Prob. 11.4ECh. 11 - Prob. 11.5ECh. 11 - Prob. 11.6ECh. 11 - Technology Solutions format for the statement of...Ch. 11 - Prob. 11.8ECh. 11 - Prob. 11.9ECh. 11 - Prob. 11.10ECh. 11 - Prob. 11.11ECh. 11 - Prob. 11.12ECh. 11 - Prob. 11.13ECh. 11 - Prob. 11.14ECh. 11 - The income statement for Electronic Wonders...Ch. 11 - Prob. 11.1APCh. 11 - Prob. 11.2APCh. 11 - Prob. 11.3APCh. 11 - Prob. 11.4APCh. 11 - Cyberdyne Systems and Virtucon are competitors...Ch. 11 - Prob. 11.6APCh. 11 - Prob. 11.7APCh. 11 - Prob. 11.8APCh. 11 - Prob. 11.1BPCh. 11 - Prob. 11.2BPCh. 11 - Prob. 11.3BPCh. 11 - Preparing statement of cash flowsindirect method...Ch. 11 - International Genetic Technologies (InGen) and The...Ch. 11 - Prob. 11.6BPCh. 11 - Prob. 11.7BPCh. 11 - Cash flows from operating activities for both the...Ch. 11 - Great Adventures (This is a continuation of the...Ch. 11 - Prob. 11.2APFACh. 11 - Prob. 11.3APFACh. 11 - American Eagle Outfitters, Inc. vs. The Buckle,...Ch. 11 - Prob. 11.5APECh. 11 - Prob. 11.6APIRCh. 11 - Written Communication Why cant we pay our...Ch. 11 - Prob. 11.8APEM
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Current asset information for Hundred Dollar Tree is presented below. Cash and cash equivalents $ 1,246,743 Marketable securities 324,166 Accounts receivable (net) Inventories Prepaid expenses Other current assets Total current assets 516,357 852,443 110,339 1.634.423 $4,684,471 Hundered Dollar Tree has a current ratio of 1.8. What is Hundred Dollar Tree's quick ratio? A) 0.69 B) 0.80 C) 0.78 D) 0.89arrow_forwardGiven the following balance sheet data, calculate net working capital: cash = OMR25, accounts receivable %3D = OMR80, inventory = OMR120, %3D net fixed assets = OMR400, %3D accounts payable = OMR15, short- %3Darrow_forwardConstruct the current assets section of the balance sheet from the following data. (Use cash as a plug figure after computing the other values.) Yearly sales (credit) $420,000 Inventory turnover 7 times Current liabilities $80,000 Current ratio 2 Average collection period 36 days Current assets: $ Cash ______ Accounts receivable ______ Inventory ______ Total current assets ______arrow_forward
- Based on this income statement, what is Operating Cash Flow Sales $661,198 Costs $446,260 Depreciation $86,721 EBIT? Taxes(31%)? Net Income?arrow_forwardCalculate the Quick Ratio using the following information: Cash Short Term Investments Accounts Receivable Inventory Other Current Assets Total Current Assets Long Term Assets Current Liabilities Long Term Liabilities 2.00 2.30 O 2.50 O 2.45 5,000 1,000 2,000 1,200 600 9,800 12,000 4,000 3,000arrow_forwardFor the company 'ODK Emporiki' the following is given its Balance Sheet and Income Statement : Assets Plots Buildings Machinery Stocks Customers Cash and cash equivalents Total assets Liability Chapter Reserves Balance sheet Long-term loans Suppliers Accounts payable Total Liabilities Profit and loss statement Net sales Cost of Sales Gross Profit Administrative expenses Disposal costs Other costs and losses Net profit 150.000 320.000 120.000 95.000 75.000 60.000 820.000 300.000 135.000 210.000 145.000 30.000 820.000 875.000 650.000 225.000 45.000 85.000 30.000 65.000 Requested: 1. The common size analysis (vertical analysis) for the above financial statements (balance sheet, income statement) of the company 'ODK Commercial'. 2. If the gross profit margin is 15% and the general liquidity is3% of the sector where the company 'ODK Emporiki' belongs, calculate and comment on the corresponding ratios of the company in relation to those of the sector. Can there be an interaction between…arrow_forward
- Select the images below to enlarge. Balance Sheet Murawski Company Balance Sheet December 31 Current Assets Investments Cash and cash equivalents Accounts receivable (net) Current liabilities Property, plant, and equipment Intangibles and other assets Total assets Prepaid expenses Total current assets Sales Revenue $330 $360 470 400 Inventory 460 390 120 160 1,380 1,310 Murawski Company Income Statement For the Years Ended December 31 Costs and expenses Cost of goods sold Selling and Administrative expenses 2022 Income Statement Interest expense Total costs and expenses Income before income taxes Long-term liabilities Stockholder's equity - common 1,030 1,040 Total liabilities and stockholder's equity $2,340 $2,210 10 420 530 $2,340 Income tax expense Net Income $900 410 2022 $3,800 2021 955 2,400 25 3,380 420 126 $294 10 380 510 $2,210 $790 380 2021 $3,460 890 2,330 20 3,240 220 66 $154 Calculate the 2022 Inventory Turnover ratio. Use whole numbers rounded to 2 decimal places, if…arrow_forwardSuppose your company sells services of $180 in exchange for $110 cash and $70 on account.Required:1. Show the journal entry to record this transaction.2. Identify the amount that should be reported as net cash flow from operating activities.3. Identify the amount that would be included in net income.4. Show how the indirect method would convert net income (requirement 3) to net cash flowfrom operating activities (requirement 2).5. What general rule about converting net income to operating cash flows is revealed by youranswer to requirement 4?arrow_forward8. Compute the acid-test (quick ratio) ratio using the following data: highly liquid assets cash, AR, ST investment A) B) C) D) 1.15 1.24 1.33 1.86 Answer: B Cash Inventory Accounts Receivable Current ratio $115,000 105,000 55,000 2.00arrow_forward
- Create a statement of cash flow for the current year using Wright Co's income statement and balance sheet. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Income Statement: Revenue Cost of Goods Sold Gross Margin SG&A EBITDA Depreciation Expense EBIT Interest Expense EBT Taxes Net Income Dividends Addition to Retained Earnings Balance Sheet: Assets Cash Accounts Receivables Inventory Total Current Assets Net Fixed Assets Total Asset Current Year 4,628.00 1,990.04 2,637.96 543.00 2,094.96 516.00 1,578.96 182.90 1,396 488.62 907.44 410 497.44 Prior Year 800 400 300 1,500 5,000 6,500 Current Year ???? 441.00 343.00 ???? 5,016.00 ????arrow_forwardmake a statement of cash flows (indirect method) costs of goods sold is 10,000arrow_forwardTwo competitors in the construction supply industry report the following selected financial data: Company A Company B Sales $ 46,570 $ 66,176 Net income 1,853 2,650 Operating cash flows 3,954 5,095 Total assets, beginning 33,355 40,527 Total assets, ending 31,675 42,114 1. Calculate the cash return on assets, cash flow to sales ratio, and asset turnover ratio for each company. (Do not round intermediate calculations. Round your final answers to 2 decimal places.) Cash return on assets: Company A:_______% Company B:_______% Cash flow to sales: Company A:_______% Company B:_______% Asset turnover: Company A:_______times Company B:_______times 2-a. Which company has the better cash flow to sales ratio?multiple choice 1 Company A Company B 2-b. Which company has the better asset turnover ratio?multiple choice 2 Company A Company Barrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
EBK CONTEMPORARY FINANCIAL MANAGEMENTFinanceISBN:9781337514835Author:MOYERPublisher:CENGAGE LEARNING - CONSIGNMENT
Financial AccountingAccountingISBN:9781305088436Author:Carl Warren, Jim Reeve, Jonathan DuchacPublisher:Cengage Learning
Financial AccountingAccountingISBN:9781337272124Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage Learning
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:9781337514835
Author:MOYER
Publisher:CENGAGE LEARNING - CONSIGNMENT
Financial Accounting
Accounting
ISBN:9781305088436
Author:Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:Cengage Learning
Financial Accounting
Accounting
ISBN:9781337272124
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Cengage Learning
The KEY to Understanding Financial Statements; Author: Accounting Stuff;https://www.youtube.com/watch?v=_F6a0ddbjtI;License: Standard Youtube License