Chapter 13, Problem 1CFSAP

1. a.

To determine

To describe: The two competitors of Company K

1. b.

To determine

To describe: The Company K’s business nature and risk factors.

1. c.

To determine

To list: Three brands of Company K.

1. d.

To determine

To describe: The largest amount of assets and liabilities.

1. e.

To determine

To describe: Number of share authorized, issued and outstanding of Company K.

1. f.

To determine

To describe: Whether Company K repurchases any share of Common stock during fiscal year ended January 31, 2013.

1. g.

To determine

To describe: The timing of revenue recognition.

1. h.

To determine

To describe: The inventory method which is used by Company K.

1. i.

To determine

To describe: Whether Company K has any business interest in foreign countries.

2. a.

To determine

The rate of return on sales of Company K, evaluate the ratio.

2. b.

To determine

The assets turnover ratio of Company K, evaluate the ratio.

2. c.

To determine

The return on assets of Company K, and evaluate the ratio.

2. d.

To determine

The leverage ratio of Company K, and evaluate the ratio.

2. e.

To determine

The return on equity ratio of Company K, and evaluate the ratio.

2. f.

To determine

The gross profit margin of Company K, and evaluate the ratio.

2. g.

To determine

The earning per share of Company K, and evaluate the ratio.

2. h.

To determine

The book value per share of Company K, and evaluate the ratio.

3. a.

To determine

The inventory turnover ratio of Company K, evaluate the ratio.

3. b.

To determine

The accounts payable turnover ratio of Company K, evaluate the ratio.

3. c.

To determine

The cash conversation cycle of Company K, and evaluate the ratio.

3. d.

To determine

The current ratio of Company K, and evaluate the ratio.

3. e.

To determine

The quick ratio of Company K, and evaluate the ratio.

3. f.

To determine

The debt ratio of Company K, and evaluate the ratio.

3. g.

To determine

The time interest ratio of Company K, and evaluate the ratio.

4. a.

To determine

To describe: The two main sources of cash.

4. b.

To determine

To describe: Whether the net cash flow operations greater than or less than net income.

4. c.

To determine

To list: The primary source of cash from investing activities.

4. d.

To determine

To list: The primary source of cash from investing activities.

4. e.

To determine

To analyze: The cash flow statement.

5. a.

To determine

To calculate: The common size percentage for sales, gross profit, operating income and net income for 2013 and 2014, and also comment about results.

5. b.

To determine

To calculate: The trend percentage of total revenue and net earnings and also comment about the results.

6. a.

To determine

To describe: The closing market price of Company K.

6. b.

To determine

To calculate: The price earnings ratio of Company K.

6. c.

To determine

To evaluate: Whether share of Company K is “buy, hold or sell” during the fiscal year.