Common-size income statement and balance sheet for store AD.

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Answer 1

Question

Chapter 14, Problem 14.40BP

1.

To determine

To prepare: Common-size income statement and balance sheet for store AD.

2.

To determine

To compute: Ratio of gross profit to sales, ratio of operating income to sales, ratio of net income to sales for profitability analysis of store AD.

To conclude: The profit performance of Store AD with comparison to industry averages.

3.

To determine

To compute: Ratio of current assets to total assets, ratio of stockholders’ equity to total assets for financial position analysis of store AD.

To conclude: The financial position of Store AD with comparison to industry averages.

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(Learning Objective 7: Calculate return on assets) Handley Grocery Corporationreported the following information in its comparative financial statements for the fiscal yearended January 31, 2018:January 31,2018January 31,2017Net sales....................................Net earnings..............................Average total assets...................$50,000$ 2,200$40,000$48,350$ 2,100$39,300Requirements1. Compute the net profit margin ratio for the years ended January 31, 2018, and 2017. Did itimprove or worsen in 2018?2. Compute asset turnover for the years ended January 31, 2018, and 2017. Did it improve orworsen in 2018?3. Compute return on assets for the years ended January 31, 2018, and 2017. Did it improveor worsen in 2018? Which component—net profit margin ratio or asset turnover—wasmostly responsible for the change in the company’s return on assets?

Profit Planning and Control This case is a manufacturer and could make specialty bikes, ski or outdoor equipment, computers, food like chocolates, saltwater taffy, cookies, or donuts, etc. Create the balance sheet, income statement, and statement of the cash flow from the following information. Use the following information for the learning experiences Sales volume units = 11,000 Sales price/unit = $100 Variable manufacturing costs/unit = $60 Fixed manufacturing costs = $210,000 Fixed sales & administration costs = $190,000 Business income tax rate = 25% Current assets = $250,000 (Cash $50,000, Accounts Receivables $100,000, Inventory $100,000) Fixed assets = $750,000 Current liabilities = $200,000 (Accounts Payable $100,000, Short Term Debt $100,000) Long Term Debt = $300,000 Owners' Equity = $500,000

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Answer 2

Question

Chapter 14, Problem 14.40BP

1.

To determine

To prepare: Common-size income statement and balance sheet for store AD.

2.

To determine

To compute: Ratio of gross profit to sales, ratio of operating income to sales, ratio of net income to sales for profitability analysis of store AD.

To conclude: The profit performance of Store AD with comparison to industry averages.

3.

To determine

To compute: Ratio of current assets to total assets, ratio of stockholders’ equity to total assets for financial position analysis of store AD.

To conclude: The financial position of Store AD with comparison to industry averages.

Expert Solution & Answer

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Answer 3

Question

Chapter 14, Problem 14.40BP

1.

To determine

To prepare: Common-size income statement and balance sheet for store AD.

2.

To determine

To compute: Ratio of gross profit to sales, ratio of operating income to sales, ratio of net income to sales for profitability analysis of store AD.

To conclude: The profit performance of Store AD with comparison to industry averages.

3.

To determine

To compute: Ratio of current assets to total assets, ratio of stockholders’ equity to total assets for financial position analysis of store AD.

To conclude: The financial position of Store AD with comparison to industry averages.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 14, Problem 14.40BP

1.

To determine

To prepare: Common-size income statement and balance sheet for store AD.

2.

To determine

To compute: Ratio of gross profit to sales, ratio of operating income to sales, ratio of net income to sales for profitability analysis of store AD.

To conclude: The profit performance of Store AD with comparison to industry averages.

3.

To determine

To compute: Ratio of current assets to total assets, ratio of stockholders’ equity to total assets for financial position analysis of store AD.

To conclude: The financial position of Store AD with comparison to industry averages.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 5

Chapter 14, Problem 14.40BP

1.

To determine

To prepare: Common-size income statement and balance sheet for store AD.

2.

To determine

To compute: Ratio of gross profit to sales, ratio of operating income to sales, ratio of net income to sales for profitability analysis of store AD.

To conclude: The profit performance of Store AD with comparison to industry averages.

3.

To determine

To compute: Ratio of current assets to total assets, ratio of stockholders’ equity to total assets for financial position analysis of store AD.

To conclude: The financial position of Store AD with comparison to industry averages.

Answer 6

Chapter 14, Problem 14.40BP

1.

To determine

To prepare: Common-size income statement and balance sheet for store AD.

Answer 7

Chapter 14, Problem 14.40BP

1.

To determine

To prepare: Common-size income statement and balance sheet for store AD.

Answer 8

2.

To determine

To compute: Ratio of gross profit to sales, ratio of operating income to sales, ratio of net income to sales for profitability analysis of store AD.

To conclude: The profit performance of Store AD with comparison to industry averages.

Answer 9

2.

To determine

To compute: Ratio of gross profit to sales, ratio of operating income to sales, ratio of net income to sales for profitability analysis of store AD.

To conclude: The profit performance of Store AD with comparison to industry averages.

Answer 10

3.

To determine

To compute: Ratio of current assets to total assets, ratio of stockholders’ equity to total assets for financial position analysis of store AD.

To conclude: The financial position of Store AD with comparison to industry averages.

Answer 11

3.

To determine

To compute: Ratio of current assets to total assets, ratio of stockholders’ equity to total assets for financial position analysis of store AD.

To conclude: The financial position of Store AD with comparison to industry averages.

Answer 12

Expert Solution & Answer

Answer 13

Expert Solution & Answer

Answer 14

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Answer 15

Ch. 14 - (Learning Objective 1) Which of the following...Ch. 14 - Prob. 2QC Ch. 14 - Prob. 3QC Ch. 14 - Prob. 4QC Ch. 14 - (Learning Objective 3) Which of the following is...Ch. 14 - (Learning Objective 4) Working capital is defined...Ch. 14 - Prob. 7QC Ch. 14 - Prob. 8QC Ch. 14 - Prob. 9QC Ch. 14 - Prob. 10QC

Common-size income statement and balance sheet for store AD.

Solution Summary: The author explains the common-size income statement and balance sheet used to compare the income statements of companies of different sizes.

Videos

To prepare: Common-size income statement and balance sheet for store AD.

To compute: Ratio of gross profit to sales, ratio of operating income to sales, ratio of net income to sales for profitability analysis of store AD.

To conclude: The profit performance of Store AD with comparison to industry averages.

To compute: Ratio of current assets to total assets, ratio of stockholders’ equity to total assets for financial position analysis of store AD.

To conclude: The financial position of Store AD with comparison to industry averages.

Want to see the full answer?

Chapter 14 Solutions

Common-size income statement and balance sheet for store AD.

Solution Summary: The author explains the common-size income statement and balance sheet used to compare the income statements of companies of different sizes.

Videos

To prepare: Common-size income statement and balance sheet for store AD.

To compute: Ratio of gross profit to sales, ratio of operating income to sales, ratio of net income to sales for profitability analysis of store AD. To conclude: The profit performance of Store AD with comparison to industry averages.

To compute: Ratio of current assets to total assets, ratio of stockholders’ equity to total assets for financial position analysis of store AD. To conclude: The financial position of Store AD with comparison to industry averages.

Want to see the full answer?

Chapter 14 Solutions

To compute: Ratio of gross profit to sales, ratio of operating income to sales, ratio of net income to sales for profitability analysis of store AD.

To conclude: The profit performance of Store AD with comparison to industry averages.

To compute: Ratio of current assets to total assets, ratio of stockholders’ equity to total assets for financial position analysis of store AD.

To conclude: The financial position of Store AD with comparison to industry averages.