Accounting (Text Only)
26th Edition
ISBN: 9781285743615
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Chapter 15FSI, Problem 1IFRS
(a)
To determine
Revenue: Revenue is the earnings from operations of a business. The operating activities are sale of goods and services, and rent revenue.
To explain: The meaning of ‘turnover’ reported in the consolidated income statement
(b)
To determine
To explain: The differences in the presentation of income statement of Group U and MJ International
(c)
To determine
Generally Accepted Accounting Principles (GAAP): These are the guidelines necessary to create accounting principles for the implementation of financial information reporting in the Country U.
To explain: The presentation of net finance costs’ subtotal at the top of the column than that would be presented under GAAP
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Suppose you want to compare Palfinger AG to another heavy equipment manufacture, Caterpillar, Inc. To compare the companies, complete the table below and calculate common-sized numbers. To common-size balance sheet numbers, divide by total assets abd to common-size income statement numbers, divide by net sales. Comment on the trends over time and levels across companies.
The
Golden
Fence Company and
Stone
Wall Corporation are competitors in manufacturing walls and fences. You are interested in comparing the two firms' profitability. Their income statements and other information are presented below.
LOADING...
(Click
the icon to view the comparative income statements.)
Golden
Fence is the larger company based on sales and total assets, so you perform the following steps to compare and analyze the companies.
Read the
requirements
LOADING...
.
Requirement a. Prepare common-size income statements. Comment on differences in the relative size of each line item. (Round percentages to the nearest tenth of a percent, X.X%.)
Percent of Sales
Golden Fence
Stone Wall
Golden Fence
Stone Wall
(amounts in millions)
Company
Corporation
Company
Corporation
Sales
$987,236
$67,450
%
%
Cost of goods sold
678,626
43,370
%
%
Gross profit
308,610
24,080…
Staples, Inc. is one of the largest suppliers of office products in the United States. It had a net income of $995.7 million and sales of $19,372.7 million in 2007. Its total assets were $8,397.3 million at the beginning of the year and $9,036.3 million at the end of the year.
What is Staples, Inc.'s (a) asset turnover ratio and (b) profit margin ratio?
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