Financial & Managerial Accounting
13th Edition
ISBN: 9781285866307
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Videos
Question
Chapter 15, Problem 15.15EX
a)
To determine
Financial Ratios: Financial ratios are the metrics used to evaluate the liquidity, capabilities, profitability, and overall performance of a company.
To compute: Ratio of liabilities to stockholders’ equity
Given info: Total liabilities and
b)
To determine
To compute: Ratio of fixed assets to long-term liabilities
Given info: Total fixed assets and long-term liabilities.
c)
To determine
To interpret: The ratio differences between the two companies.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Ratio of Liabilities to Stockholders' Equity and Ratio of Fixed Assets to Long-Term Liabilities
Recent balance sheet information for two companies in the food industry, Mondelez International, Inc., and The Hershey Company, is as follows (in thousands):
Mondelez
Hershey
Net property, plant, and equipment
$8,482,000
$2,130,294
Current liabilities
16,737,000
2,418,566
Long-term debt
12,532,000
3,254,280
Other long-term liabilities
7,747,000
622,908
Stockholders' equity
25,713,000
1,407,266
a. Determine the ratio of liabilities to stockholders' equity for both companies. Round your answers to one decimal place.
Mondelez
fill in the blank 1
Hershey
fill in the blank 2
b. Determine the ratio of fixed assets to long-term liabilities for both companies. Round your answers to one decimal place.
Mondelez
fill in the blank 3
Hershey
fill in the blank 4
c. Although Hershey uses more debt, it has slightly stronger creditor protection and…
Ratio of Liabilities to Stockholders' Equity and Ratio of Fixed Assets to Long-Term Liabilities
Recent balance sheet information for two companies in the food industry, Mondelez International, Inc., and The Hershey Company, is as follows (in thousands):
Mondelez
Hershey
Net property, plant, and equipment
$8,482,000
$2,130,294
Current liabilities
16,737,000
2,418,566
Long-term debt
12,532,000
3,254,280
Other long-term liabilities
7,747,000
622,908
Stockholders' equity
25,713,000
1,407,266
a. Determine the ratio of liabilities to stockholders' equity for both companies. Round your answers to one decimal place.
Mondelez
fill in the blank 1
Hershey
fill in the blank 2
b. Determine the ratio of fixed assets to long-term liabilities for both companies. Round your answers to one decimal place.
Mondelez
fill in the blank 3
Hershey
fill in the blank 4
c. Although___________uses more debt, it has____________creditor protection and…
Recent balance sheet information for two companies in the food industry, Mondelez International, Inc. and The Hershey Company, is as follows (in thousands): Mondelez HersheyNet property, plant, and equipment $10,010,000 $1,674,071Current liabilities 14,873,000 1,471,110Long-term debt 15,574,000 1,530,967Other long-term liabilities 12,816,000 716,013Stockholders’ equity 32,215,000 1,036,749a. Determine the ratio of liabilities to stockholders’ equity for both companies. Round to one decimal place.b. Determine the ratio of fixed assets to long-term liabilities for both companies. Round to one decimal place.c. Interpret the ratio differences between the two companies.
Chapter 15 Solutions
Financial & Managerial Accounting
Ch. 15 - Prob. 1DQCh. 15 - What is the advantage of using comparative...Ch. 15 - A companys current year net income (after income...Ch. 15 - Prob. 4DQCh. 15 - Prob. 5DQCh. 15 - Prob. 6DQCh. 15 - Prob. 7DQCh. 15 - Prob. 8DQCh. 15 - Prob. 9DQCh. 15 - Prob. 10DQ
Ch. 15 - Prob. 15.1APECh. 15 - Prob. 15.1BPECh. 15 - Prob. 15.2APECh. 15 - Vertical analysis Income statement information for...Ch. 15 - Prob. 15.3APECh. 15 - Prob. 15.3BPECh. 15 - Accounts receivable analysis A company reports the...Ch. 15 - Accounts receivable analysis A company reports the...Ch. 15 - Prob. 15.5APECh. 15 - Inventory analysis A company reports the...Ch. 15 - Prob. 15.6APECh. 15 - Long-term solvency analysis The following...Ch. 15 - Prob. 15.7APECh. 15 - Times interest earned A company reports the...Ch. 15 - Prob. 15.8APECh. 15 - Prob. 15.8BPECh. 15 - Prob. 15.9APECh. 15 - Prob. 15.9BPECh. 15 - Prob. 15.10APECh. 15 - Common stockholders' profitability analysis A...Ch. 15 - Prob. 15.11APECh. 15 - Earnings per share and price-earnings ratio A...Ch. 15 - Prob. 15.1EXCh. 15 - Vertical analysis of income statement The...Ch. 15 - Common-sized income statement Revenue and expense...Ch. 15 - Vertical analysis of balance sheet Balance sheet...Ch. 15 - Prob. 15.5EXCh. 15 - Current position analysis The following data were...Ch. 15 - Prob. 15.7EXCh. 15 - Prob. 15.8EXCh. 15 - Prob. 15.9EXCh. 15 - Prob. 15.10EXCh. 15 - Inventory analysis The following data were...Ch. 15 - Inventory analysis Dell Inc. and Hewlett-Packard...Ch. 15 - Prob. 15.13EXCh. 15 - Prob. 15.14EXCh. 15 - Prob. 15.15EXCh. 15 - Prob. 15.16EXCh. 15 - Profitability ratios The following selected data...Ch. 15 - Profitability ratios Ralph Lauren Corporation...Ch. 15 - Six measures of solvency or profitability The...Ch. 15 - Five measures of solvency or profitability The...Ch. 15 - Prob. 15.21EXCh. 15 - Prob. 15.22EXCh. 15 - Prob. 15.23EXCh. 15 - Prob. 15.24EXCh. 15 - Prob. 15.25EXCh. 15 - Prob. 15.26EXCh. 15 - Horizontal analysis of income statement For 2016,...Ch. 15 - Prob. 15.2APRCh. 15 - Prob. 15.3APRCh. 15 - Nineteen measures of solvency and profitability...Ch. 15 - Solvency and profitability trend analysis Addai...Ch. 15 - Prob. 15.1BPRCh. 15 - Prob. 15.2BPRCh. 15 - Effect of transactions on current position...Ch. 15 - Nineteen measures of solvency and profitability...Ch. 15 - Prob. 15.5BPRCh. 15 - Financial Statement Analysis The financial...Ch. 15 - Prob. 15.1CPCh. 15 - Prob. 15.2CPCh. 15 - Prob. 15.3CPCh. 15 - Prob. 15.4CPCh. 15 - Prob. 15.5CP
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
- Grammatico Company has just completed its third year of operations. The income statement is as follows: Selected information from the balance sheet is as follows: Required: Note: Round answers to two decimal places. 1. Compute the times-interest-earned ratio. 2. Compute the debt ratio. 3. CONCEPTUAL CONNECTION Assume that the lower quartile, median, and upper quartile values for debt and times-interest-earned ratios in Grammaticos industry are as follows: How does Grammatico compare with the industrial norms? Does it have too much debt?arrow_forwardReturn on assets The following data (in millions) were adapted from recent financial statements of Tootsie Roll Industries Inc. (TR): What is Tootsie Roll’s percent of the cost of sales to sales? Round to one decimal place.arrow_forwardAnalyze and compare Zynga, Electronic Arts, and Take-Two Data (in millions) from recent financial statements of Zynga Inc. (ZNGA), Electronic Arts Inc. (EA), and Take-Two Interactive Software, Inc. (TTWO) are as follows: a. Compute the working capital for Year 2 and Year 1 for each company. b. Which company has the largest working capital? c. Compute the current ratio for Year 2 and Year 1 for each company. Round to one decimal place. d. For Year 2, rank the companies from most liquid to least liquid based upon the current ratio.arrow_forward
- Juroe Company provided the following income statement for last year: Juroes balance sheet as of December 31 last year showed total liabilities of 10,250,000, total equity of 6,150,000, and total assets of 16,400,000. Required: Note: Round answers to two decimal places. 1. Calculate the times-interest-earned ratio. 2. Calculate the debt ratio. 3. Calculate the debt-to-equity ratio.arrow_forwardReturn on assets The following data (in millions) were adapted from recent financial statements of Tootsie Roll Industries Inc. (TR): The percent a company adds to its cost of sales to determine selling price is called a markup. What is Tootsie Roll’s markup percent? Round to one decimal place.arrow_forwardProfitability Ratios The following data came from the financial statements of Israel Company: Revenue $900,000 Assets $600,000 Expenses 600,000 Liabilities 100,000 Net income 300,000 Average equity 500,000 Required:arrow_forward
- Income Statement Ratio The income statement of Holly Enterprises shows operating revenues of $134,800, selling expenses of $38,310, general and administrative expenses of $36,990, interest expense of $580, and income tax expense of $13,920. Hollys stockholders equity was $280,000 at the beginning of the year and $320,000 at the end of the year. The company has 20,000 shares of stock outstanding at the end of the year. Required Compute Hollys profit margin. What other information would you need in order to comment on whether this ratio is favorable?arrow_forwardRecent balance sheet information for two companies in the food industry, Mondelez International, Inc. (MDLZ), and The Hershey Company (HSY), is as follows (in thousands): Mondelez Hershey Net property, plant, and equipment $8,229,000 $2,177,248 Current liabilities 14,417,000 1,909,443 Long-term debt 13,217,000 2,347,455 Other long-term liabilities 8,689,000 439,748 Stockholders' equity 25,215,000 827,687 a. Determine the ratio of liabilities to stockholders' equity for both companies. Round to one decimal place. Mondelez fill in the blank 1 Hershey fill in the blank 2 b. Determine the ratio of fixed assets to long-term liabilities for both companies. Round to one decimal place. Mondelez fill in the blank 3 Hershey fill in the blank 4arrow_forwardRecent balance sheet information for two companies in the food industry, Santa Fe Company and Madrid Company, is as follows (in thousands): Santa Fe Madrid Net property, plant, and equipment $428,320 $817,800 Current liabilities 104,441 471,040 Long-term debt 396,196 588,816 Other long-term liabilities 139,204 228,984 Stockholders' equity 172,930 322,210 a. Determine the ratio of liabilities to stockholders' equity for both companies. Round to one decimal place. Santa Fe Madrid b. Determine the ratio of fixed assets to long-term liabilities for both companies. Round to one decimal place. Santa Fe Madridarrow_forward
arrow_back_ios
arrow_forward_ios
Recommended textbooks for you
Managerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College Pub
Financial And Managerial AccountingAccountingISBN:9781337902663Author:WARREN, Carl S.Publisher:Cengage Learning,
Financial Accounting: The Impact on Decision Make...AccountingISBN:9781305654174Author:Gary A. Porter, Curtis L. NortonPublisher:Cengage Learning
Managerial Accounting: The Cornerstone of Busines...AccountingISBN:9781337115773Author:Maryanne M. Mowen, Don R. Hansen, Dan L. HeitgerPublisher:Cengage Learning
Survey of Accounting (Accounting I)AccountingISBN:9781305961883Author:Carl WarrenPublisher:Cengage Learning
Managerial Accounting
Accounting
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:South-Western College Pub
Financial And Managerial Accounting
Accounting
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:Cengage Learning,
Financial Accounting: The Impact on Decision Make...
Accounting
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Cengage Learning
Managerial Accounting: The Cornerstone of Busines...
Accounting
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Cengage Learning
Survey of Accounting (Accounting I)
Accounting
ISBN:9781305961883
Author:Carl Warren
Publisher:Cengage Learning
Financial ratio analysis; Author: The Finance Storyteller;https://www.youtube.com/watch?v=MTq7HuvoGck;License: Standard Youtube License