![EBK MANAGERIAL ACCOUNTING](https://www.bartleby.com/isbn_cover_images/9781259738586/9781259738586_largeCoverImage.jpg)
EBK MANAGERIAL ACCOUNTING
3rd Edition
ISBN: 9781259738586
Author: Whitecotton
Publisher: MCGRAW HILL BOOK COMPANY
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 13, Problem 7GAP
To determine
Introduction:
Accounting ratio helps in comparing two or more financial data of the financial statements of the company. It is used by various parties to measure the performance of the companies.
To choose:
The company which is best suitable for investment.
Expert Solution & Answer
![Check Mark](/static/check-mark.png)
Want to see the full answer?
Check out a sample textbook solution![Blurred answer](/static/blurred-answer.jpg)
Students have asked these similar questions
please answer the question according to the conditions shown in pic. below
Q:Identify two key financial ratios you would use as a guide (and why) to help you determine which business you would prefer to invest in
We have all heard of Return on Investment or (ROI). Please research anddescribe five other business metrics that you may use in your analysis withyour business plan.Also, please describe how these ratios are calculated for example...Quick Ratio or Acid Test, Cash + Accounts Receivable ÷ Current Liabilities.
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
Chapter 13 Solutions
EBK MANAGERIAL ACCOUNTING
Ch. 13 - Prob. 1QCh. 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 - Why are some analyses called horizontal and others...Ch. 13 - Slow Cellar’s current ratio increased from 1.2 to...Ch. 13 - From last year to this year. Colossal Company’s...Ch. 13 - From last year to this year, Berry Barn reported...Ch. 13 - Prob. 10Q
Ch. 13 - Prob. 1MCCh. 13 - Prob. 2MCCh. 13 - Prob. 3MCCh. 13 - Prob. 4MCCh. 13 - Prob. 5MCCh. 13 - Prob. 6MCCh. 13 - Prob. 7MCCh. 13 - Prob. 8MCCh. 13 - Prob. 9MCCh. 13 - Prob. 1MECh. 13 - Prob. 2MECh. 13 - Prob. 3MECh. 13 - Prob. 4MECh. 13 - Prob. 5MECh. 13 - Prob. 6MECh. 13 - Prob. 7MECh. 13 - Prob. 8MECh. 13 - Prob. 9MECh. 13 - Prob. 10MECh. 13 - Prob. 11MECh. 13 - Prob. 12MECh. 13 - Prob. 13MECh. 13 - Prob. 14MECh. 13 - Prob. 1ECh. 13 - Prob. 2ECh. 13 - Prob. 3ECh. 13 - Prob. 4ECh. 13 - Prob. 5ECh. 13 - Prob. 6ECh. 13 - Prob. 7ECh. 13 - Computing and Interpreting Liquidity Ratios...Ch. 13 - Prob. 9ECh. 13 - Prob. 10ECh. 13 - Prob. 11ECh. 13 - Prob. 12ECh. 13 - Prob. 13ECh. 13 - Analyzing the Impact of Selected Transactions on...Ch. 13 - Prob. 15ECh. 13 - Prob. 1.1GAPCh. 13 - Prob. 1.2GAPCh. 13 - Prob. 2.1GAPCh. 13 - Prob. 2.2GAPCh. 13 - Prob. 2.3GAPCh. 13 - Prob. 2.4GAPCh. 13 - Prob. 2.5GAPCh. 13 - Prob. 2.6GAPCh. 13 - Prob. 2.7GAPCh. 13 - Prob. 2.8GAPCh. 13 - Prob. 3.1GAPCh. 13 - Prob. 3.2GAPCh. 13 - Prob. 3.3GAPCh. 13 - Prob. 4.1GAPCh. 13 - Prob. 4.2GAPCh. 13 - Prob. 4.3GAPCh. 13 - Prob. 5.1GAPCh. 13 - Prob. 5.2GAPCh. 13 - Prob. 5.3GAPCh. 13 - Prob. 5.4GAPCh. 13 - Prob. 6.1GAPCh. 13 - Prob. 6.2GAPCh. 13 - Prob. 7GAPCh. 13 - Prob. 1.1GBPCh. 13 - Prob. 1.2GBPCh. 13 - Prob. 2.1GBPCh. 13 - Prob. 2.2GBPCh. 13 - Prob. 2.3GBPCh. 13 - Prob. 2.4GBPCh. 13 - Prob. 2.5GBPCh. 13 - Prob. 2.6GBPCh. 13 - Prob. 2.7GBPCh. 13 - Prob. 2.8GBPCh. 13 - Prob. 3.1GBPCh. 13 - Prob. 3.2GBPCh. 13 - Prob. 3.3GBPCh. 13 - Prob. 4.1GBPCh. 13 - Prob. 4.2GBPCh. 13 - Prob. 4.3GBPCh. 13 - Prob. 5.1GBPCh. 13 - Prob. 5.2GBPCh. 13 - Prob. 5.3GBPCh. 13 - Prob. 5.4GBPCh. 13 - Prob. 6.1GBPCh. 13 - Prob. 6.2GBPCh. 13 - Prob. 7GBP
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
- The initial analysis should include the following: The ratio equation The calculation of the ratio using the equation and the pre-assigned Quick Study or Exercise from the textbook. (See below) Use the result in a sentence; i.e. For every dollar invested in assets the company is earning 22.4 cents or 22.4% in net income. Then explain whether this is a good result or a result that needs improving. Use citations to cite any outside sources used. The original post should include at least three (3) sentences but no more than seven (7) sentences. SHOW WORKarrow_forwardHere you will find some income statements and balance sheets for Sears Holdings (SHLD) and Taget Corp (TGT). Assume that you are a financial manager at Sear and want to compare your firm’s situation with that of Target. Calculate represenatative ratios for liquidity, asset management efficiency, financial leverage (capital structure), and profitability for both Sears and Target. How would you summarize the financial performance of Sears compared to target (its benchmark firm)? Include Sears and Targets current ratio, acid-test ratio, average collection period, accounts receivable turnover, inventory turnover, debt ratio, timed interest earned, total asset turnover, fixed asset turnover, gross profit margin, operating profit margin, net profit margin, operating return on assets, and return on equity.arrow_forwardSelect one company of the 30 companies that make up the Dow Jones Industrial Average (DJIA). a. Provide a brief history of the company chosen from the 30 companies of the DJIA.b.Describe the Dividend Discount Model (DDM). Using the DDM value the companyc.Provide a brief description of the Residual Income Model. Using the RIM value, the companyd.Describe the Free Cash Flow Model (FCF). Using the FCF value the companye. Describe the P/E ratio for the company and determine the expected price of the company using Earnings, Cash Flow and Salesf.summary of the detailed fundamental analysis for the company, provide a current status of the company and then explain if you would invest in the company at the current price. Explain why you made the investment decision and at what price range you would invest money in this company.arrow_forward
- Susan is looking for a method of how she could calculate and interpret the financial ratio so as to have an analysis and monitoring of the firm's performance. Susan should use a. Benchmarking b. Ratio Analysis c. Cross Sectional Analysis d. Quick Ratio Analysisarrow_forwardDiscuss why an investment analyst would use financial ratio analysis to decide the investment-worthy of a company? Give at least five reasons why.arrow_forwardGeorge H. and James W. have identified two companies, Riccarton Plc and Edinburgh Plc they would be interested in investing. As they can only invest in one of the companies, they have asked you to provide them with an assessment of the performance of both companies based on the following ratios: Return on Capital Employed (ROCE), Current Ratio, Gearing Ratio and Price/Earnings (P/E) Ratio. The following information from the Statement of Financial Position (Balance Sheet) and the Income Statement (Profit and Loss Account) for both companies is available: (a) Calculate the following ratios: • Return on Capital Employed (ROCE) • Current Ratio • Gearing Ratio • Price/Earnings (P/E) Ratio (b) Based on the above ratios explain, which company George H. and James W. should invest in. You should also briefly discuss the limitations of your analysis.arrow_forward
- The initial analysis should include the following: The ratio equation The calculation of the ratio using the equation and the pre-assigned Quick Study or Exercise from the textbook. Use the result in a sentence; i.e. For every dollar invested in assets the company is earning 22.4 cents or 22.4% in net income. Then explain whether this is a good result or a result that needs improving. Use citations to cite any outside sources used. The original post should include at least three (3) sentences but no more than seven (7) sentences.arrow_forwardUse the following information to answer the questions that follow. A. Calculate the operating income percentage for each of the courses. Comment on how your analysis has changed for each course. B. Perform a vertical analysis for each course. Based on your analysis, what accounts would you want to investigate further? How might management utilize this information? C. Which method of analysis (using a dollar value or percentage) is most relevant and/or useful? Explainarrow_forwardPlease take a look below at the two companies' financial ratios. Use the material your learned in the chapter to try and identify the industries these two companies operate in. You are going to be graded on the quality of your analysis and arguments (e.g. this ratio indicates that... and that ratio indicates the other,... and taken together these ratios indicate that.... (and so forth)) : Company A Company B P/E Ratio: 30 Price/Sales: 6 Price/Book Value of Equity: 7.5 Profit Margin: 20% Operating Margin: 25% Return on Assets (ROA): 6% Return On Equity (ROE): 25% Current Ratio: 3 P/E Ratio: 17 Price/Sales: 0.6 Price/Book Value of Equity: 3 Profit Margin: 3% Operating Margin: 5% Return on Assets (ROA): 7% Return On Equity (ROE): 15% Current Ratio: 1arrow_forward
- Based on the historical company financial information and business description is given below answer the following: (a) Identify three key ratios you would use as a guide (and why) to help you determine which business you would prefer to invest in?(b) What further information might you consider or need before making a final investment decision?arrow_forwarda. Enumerate four (4) factors to consider in analyzing the domestic economy as part of fundamental analysis. b. Distinguish between time limit orders and Limit orders c. Explain the following Investment ratios and indicate how they are computed:Earnings per share (EPS) and Price/Earnings ratio (P/E).d. What is market efficiency? Differentiate between weak and semi strong form efficiency e. Next Pharmacy Ltd, an all equity finance company has started the production of a vaccine against COVID-19. The popularity of the vaccine is such that it expects to pay its shareholders dividends of ȼ150 which grows steadily at 10%. The company has a beta of 1.75. The risk-free rate is 5% and the expected return on the market is 18.34%.Required: Calculate the stock’s required rate of return and price per share.arrow_forwardCorporate Finance Application Complete both parts of this assignment. You will work on some of these pieces earlier in the course when you submit the Module 3: Portfolio Milestone and the Module 5 Portfolio Milestone. Part One: Ratio Analysis Pick one debt ratio and one profitability ratio, which you did not analyze, from the week three portfolio milestone. Research a publicly traded technology company and access the financial statements needed to calculate those two ratios. Provide a cross-sectional analysis comparing the results from TechnoTCL Download TechnoTCLand your chosen company for the two ratios. Prepare a presentation (maximum of 4 slides – no speaker notes required) with the following information: Slide One: Analyze the two ratios including how the ratio is calculated and how it is used. Slide Two: Introduce the public company chosen, describe the information used for the ratios and calculate the two selected ratios. Slide Three: Show the two ratios for the two companies…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage LearningPrinciples of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax CollegeEBK CONTEMPORARY FINANCIAL MANAGEMENTFinanceISBN:9781337514835Author:MOYERPublisher:CENGAGE LEARNING - CONSIGNMENT
![Text book image](https://www.bartleby.com/isbn_cover_images/9781337690881/9781337690881_smallCoverImage.gif)
Cornerstones of Financial Accounting
Accounting
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Cengage Learning
Principles of Accounting Volume 2
Accounting
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax College
![Text book image](https://www.bartleby.com/isbn_cover_images/9781337514835/9781337514835_smallCoverImage.jpg)
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:9781337514835
Author:MOYER
Publisher:CENGAGE LEARNING - CONSIGNMENT
Capital Budgeting Introduction & Calculations Step-by-Step -PV, FV, NPV, IRR, Payback, Simple R of R; Author: Accounting Step by Step;https://www.youtube.com/watch?v=hyBw-NnAkHY;License: Standard Youtube License