Financial Accounting: Information for Decisions
9th Edition
ISBN: 9781260158809
Author: Wild, John
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Chapter 13, Problem 2QS
Summary Introduction
Concept Introduction:
Standard of comparison:
A company does the business analysis by comparing its business results with a similar company, competitors or industry. The standard of comparison is determined on the basis of the scope of the analysis. For example, a multinational company shall use industry level as the standard of comparisons.
To indicate:the standard of comparison for each of the given cases.
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Comparison:1. Observe the trend of revenues for both companies. Which company has higher revenue?2. Observe the gross margin for both companies. Which company is more profitable?3. Observe the operating expenses for both companies. Which company has more operating expenses?4. Observe the net income for both companies. Which company is more profitable?5. Which company is more profitable using this type of analysis?
Your Task…
Using your assigned financial statements calculate the required ratios below
Indicate if the change from year to year is favorable or unfavorable.
All values should be accurate to at least two decimal places.
The expectation is to submit a professional report free of grammar and spelling errors and easy to read. Think of this as a menu you would be handing to a customer.
All calculations are to be represented.
Analysis of Profitability
Gross Profit Ratio
Operating Profit Ratio
Net Profit Ratio
Sales to Total Assets Ratio
Return on Total Assets
Return on Equity
Earnings Per Share
Using the financial statements
provided below for ABC
Manufacturing Company, calculate all the
ratios listed below for both 2020 and2021. Assume that all sales are credit sales.
(a) Calculate the ratios forABC Manufacturing Company for2020 and 2021.
(b)Put an“I/D” beside the Year 2021 ratio calculation if the ratio has Improved/Deteriorated.
Putan“S”/“W” beside the Year 2021 ratio if ABC
Manufacturing Company’s ratio is Stronger/Weake rthan its competitors
Chapter 13 Solutions
Financial Accounting: Information for Decisions
Ch. 13 - Explain the difference between financial reporting...Ch. 13 - Prob. 2DQCh. 13 - Prob. 3DQCh. 13 - Prob. 4DQCh. 13 - Prob. 5DQCh. 13 - Prob. 6DQCh. 13 - Prob. 7DQCh. 13 - Prob. 8DQCh. 13 - Prob. 9DQCh. 13 - Prob. 10DQ
Ch. 13 - Prob. 11DQCh. 13 - Prob. 12DQCh. 13 - Prob. 13DQCh. 13 - Prob. 14DQCh. 13 - Prob. 15DQCh. 13 - Prob. 16DQCh. 13 - Prob. 17DQCh. 13 - Prob. 1QSCh. 13 - Prob. 2QSCh. 13 - Prob. 3QSCh. 13 - Prob. 4QSCh. 13 - Prob. 5QSCh. 13 - Prob. 6QSCh. 13 - Prob. 7QSCh. 13 - Prob. 8QSCh. 13 - Which of the following gains or losses would...Ch. 13 - Prob. 1ECh. 13 - Prob. 2ECh. 13 - Prob. 3ECh. 13 - Prob. 4ECh. 13 - Prob. 5ECh. 13 - Prob. 6ECh. 13 - Prob. 7ECh. 13 - Prob. 10ECh. 13 - Prob. 12ECh. 13 - Prob. 13ECh. 13 - Prob. 14ECh. 13 - Prob. 15ECh. 13 - Prob. 16ECh. 13 - Prob. 1PSACh. 13 - Prob. 2PSACh. 13 - Prob. 3PSACh. 13 - Prob. 5PSACh. 13 - Prob. 6PSACh. 13 - Selected comparative financial statements of...Ch. 13 - Prob. 2PSBCh. 13 - Prob. 3PSBCh. 13 - Prob. 5PSBCh. 13 - Prob. 6PSBCh. 13 - Prob. 13SPCh. 13 - Prob. 2FSACh. 13 - Prob. 3FSACh. 13 - Prob. 1BTNCh. 13 - Prob. 5BTN
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