FUND OF FIN ACCT W/CONNECT (LL)>CUSTOM
5th Edition
ISBN: 9781259684654
Author: PHILLIPS
Publisher: MCG CUSTOM
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Chapter 13, Problem 13.3E
1)
To determine
To Conduct: A Horizontal analysis by calculating the year-over-year changes of Incorporation CTand the effect of change in computer price comparing to the changes in Incorporation CT’s total revenue, cost of crude oil and products.
2)
To determine
vertical analysis by expressing each line as a percentage of total revenues and to find out whether Incorporation CT earned more sales in 20 l3 compared to 2012.
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According to the producer price index database maintained by the Bureau of Labor Statistics, the average cost of computer equipment fell 3.8 percent between January and December 2016. Let’s see whether these changes are reflected in the income statement of Computer Tycoon Inc. for the year ended December 31, 2016.
2016
2015
Sales Revenue
$
120,000
$
150,000
Cost of Goods Sold
70,000
79,500
Gross Profit
50,000
70,500
Selling, General, and Administrative Expenses
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41,000
Interest Expense
700
575
Income before Income Tax Expense
11,300
28,925
Income Tax Expense
2,500
7,000
Net Income
$
8,800
$
21,925
Required:
Compute the gross profit percentage for each year. Assuming that the change from 2015 to 2016 is the beginning of a sustained trend, is Computer Tycoon likely to earn more or less gross profit from each dollar of sales in 2017?
Compute the net profit margin…
Analyzing Operational ChangesOperating results for department B of Shaw Company during 2016 are as follows:
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$755,000
Cost of goods sold
480,000
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275,000
Direct expenses
215,000
Common expenses
123,000
Total expenses
338,000
Net loss
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Use a negative sign with your answer to indicate if the effect increases the company's net loss.
If Department B increased its selling price by 10%, the effect on net income (loss) would be $Answer
Analyzing Operational ChangesOperating results for department B of Delta Company during 2016 are as follows:
Sales
$538,000
Cost of goods sold
378,000
Gross profit
160,000
Direct expenses
120,000
Common expenses
66,000
Total expenses
186,000
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Suppose that department B could increase physical volume of product sold by 10% if it spent an additional $17,000 on advertising while leaving selling prices unchanged. What effect would this have on the department's net income or net loss? (Ignore income tax in your calculations.)
Use a negative sign to indicate a net loss answer; otherwise do not use negative signs with your answers.
Sales
Answer
Cost of goods sold
Answer
Gross profit
Answer
Direct expenses
Answer
Common expenses
Answer
Total expenses
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Net income (loss)
Answer
Chapter 13 Solutions
FUND OF FIN ACCT W/CONNECT (LL)>CUSTOM
Ch. 13 - What is the general goal of trend analysis?Ch. 13 - Prob. 2QCh. 13 - What is ratio analysis? Why is it useful?Ch. 13 - What benchmarks are commonly used for interpreting...Ch. 13 - Prob. 5QCh. 13 - Prob. 6QCh. 13 - Slow Cellars current ratio increased from 1.2 to...Ch. 13 - From last year to this year, Colossal Companys...Ch. 13 - From last year to this year, Berry Bam reported...Ch. 13 - Explain whether the following situations, taken...
Ch. 13 - What are the two essential characteristics of...Ch. 13 - Prob. 12QCh. 13 - Prob. 13QCh. 13 - Prob. 14QCh. 13 - Prob. 15QCh. 13 - Prob. 16QCh. 13 - 1. Which of the following ratios is not used to...Ch. 13 - Prob. 2MCCh. 13 - Prob. 3MCCh. 13 - Analysts use ratios to a. Compare different...Ch. 13 - Which of the following ratios incorporates stock...Ch. 13 - Prob. 6MCCh. 13 - Prob. 7MCCh. 13 - A bank is least likely to use which of the...Ch. 13 - Prob. 9MCCh. 13 - (Supplement 13A) Which of the following items is...Ch. 13 - Calculations for Horizontal Analyses Using the...Ch. 13 - Calculations for Vertical Analyses Refer to M13-1....Ch. 13 - Interpreting Horizontal Analyses Refer to the...Ch. 13 - Interpreting Vertical Analyses Refer to the...Ch. 13 - Prob. 13.5MECh. 13 - Prob. 13.6MECh. 13 - Prob. 13.7MECh. 13 - Analyzing the Inventory Turnover Ratio A...Ch. 13 - Inferring Financial Information Using the Current...Ch. 13 - Prob. 13.10MECh. 13 - Identifying Relevant Ratios Identify the ratio...Ch. 13 - Prob. 13.12MECh. 13 - Analyzing the Impact of Accounting Alternatives...Ch. 13 - Describing the Effect of Accounting Decisions on...Ch. 13 - Prob. 13.1ECh. 13 - Prob. 13.2ECh. 13 - Prob. 13.3ECh. 13 - Computing Profitability Ratios Use the information...Ch. 13 - Prob. 13.5ECh. 13 - Matching Each Ratio with Its Computational Formula...Ch. 13 - Computing and Interpreting Selected Liquidity...Ch. 13 - Prob. 13.8ECh. 13 - Prob. 13.9ECh. 13 - Prob. 13.10ECh. 13 - Prob. 13.11ECh. 13 - Prob. 13.12ECh. 13 - Prob. 13.13ECh. 13 - Prob. 13.14ECh. 13 - Analyzing the Impact of Alternative Inventory...Ch. 13 - Prob. 13.1CPCh. 13 - Analyzing Comparative Financial Statements Using...Ch. 13 - Prob. 13.3CPCh. 13 - Prob. 13.4CPCh. 13 - Prob. 13.5CPCh. 13 - Prob. 13.6CPCh. 13 - Prob. 13.7CPCh. 13 - Prob. 13.1PACh. 13 - Analyzing Comparative Financial Statements Using...Ch. 13 - Prob. 13.3PACh. 13 - Prob. 13.4PACh. 13 - Interpreting Profitability, Liquidity, Solvency,...Ch. 13 - Using Ratios to Compare Loan Requests from Two...Ch. 13 - Prob. 13.7PACh. 13 - Prob. 13.1PBCh. 13 - Prob. 13.2PBCh. 13 - Prob. 13.3PBCh. 13 - Prob. 13.4PBCh. 13 - Interpreting Profitability, Liquidity, Solvency,...Ch. 13 - Using Ratios to Compare Loan Requests from Two...Ch. 13 - Prob. 13.7PBCh. 13 - Prob. 13.1SDCCh. 13 - Prob. 13.2SDCCh. 13 - Prob. 13.5SDCCh. 13 - Prob. 13.6SDCCh. 13 - Prob. 13.7SDCCh. 13 - Prob. 13.1CC
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