ACCOUNTING PRINCIPLES 122 5/16 >C<
17th Edition
ISBN: 9781323461471
Author: Horngren
Publisher: PEARSON C
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Chapter 17, Problem S17.7SE
Use the following information for Short Exercises S17-6 through S17-10.
Shine’s Companies, a home improvement store chain, reported the following summarized figures:
| SHINE’S COMPANIES Income Statement Years Ended May 31, 2016 and 2015 |
||
| 2016 | 2015 | |
| Net Sales | $ 57,200,000 | $ 41,100,000 |
| Cost of Goods Sold | 20,600,000 | 29,300,000 |
| Interest Expense | 700,000 | 630,000 |
| All Other Expenses | 6,900,000 | 8,400,000 |
| Net Income | $ 29,000,000 | $ 2,770,000 |
| SHINE’S COMPANIES Balance Sheet May 31, 2016 and 2015 |
|||||
| Assets | Liabilities | ||||
| 2016 | 2015 | 2016 | 2015 | ||
| Cash | $ 2,200,000 | $ 1,800,000 | Total Current Liabilities | $ 24,000,000 | $ 12,900,000 |
| Short-term investments | 26,000,000 | 10,000,000 | Long-term Liabilities | 13,400,000 | 10,800,000 |
| 7,200,000 | 5,400,000 | Total Liabilities | 37,400,000 | 23,700,000 | |
| Merchandise Inventory | 7,100,000 | 8,200,000 | |||
| Other Current Assets | 9,000,000 | 1,800,000 | Common Stock | 13,000,000 | 13,000,000 |
| Total Current Assets | 51,500,000 | 27,200,000 | 33,100,000 | 18,500,000 | |
| All Other Assets | 32,000,000 | 28,000,000 | Total Equity | 46,100,000 | 31,500,000 |
| Total Assets | $ 83,500,000 | $ 55,200,000 | Total Liabilities and Equity | $ 83,500,000 | $ 55,200,000 |
Shine’s has 100,000 common shares outstanding during 2016.
S17-6Evaluating
Requirements
- Compute Shine’s Companies’ current ratio at May 31,2016 and 2015.
- Did Shine’s Companies’ current ratio improve, deteriorate, or hold steady during 2016?
S17-7 Computing inventory, gross profit, and receivables ratios
Requirements
- Compute the inventory turnover, days’ sales in inventory, and gross profit percentage for Shine’s Companies for 2016.
- Compute day’s sales in receivables during 2016. Round dollar amounts to three decimal places. Assume all sales were on account.
- What do these ratios say about Shine’s Companies’ ability to sell inventory and collect receivables?
S17-8 Measuring to pay liabilities
Requirements
- Compute the debt ratio and the debt to equity ratio at May 331, 29016, for Shine’s Companies.
- Is Shine’s ability to pay its liabilities strong or weak? Explain your reasoning.
S17-9 Measuring profitability
Requirement
- Compute the profit margin ratio for Shine’s Companies for 2016.
- Compute the rate of return on total assets for 2016.
- Compute the asset turnover ratio for 2016.
- Compute the rate of return on common stockholders’ equity for 2016.
- Are these
rates of return strong or weak? Explain your reasoning.
S17-10 Computing EPS and P/E ratio
Requirements
- Compute earnings per share (EPS) for 2016 for Shine’s. Round to the nearest cent.
- Compute Shine’s Companies’ price/earnings ratio for 2016. The market price per share of Shine’s stock is $ 65.50.
- What do these results mean when evaluating Shine’s Companies’ profitability?
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Chapter 17 Solutions
ACCOUNTING PRINCIPLES 122 5/16 >C<
Ch. 17 - Prob. 1QCCh. 17 - Prob. 2QCCh. 17 - Prob. 3QCCh. 17 - Prob. 4QCCh. 17 - Prob. 5QCCh. 17 - Prob. 6QCCh. 17 - Prob. 7QCCh. 17 - Prob. 8QCCh. 17 - Prob. 9QCCh. 17 - Prob. 10QC
Ch. 17 - Prob. 1RQCh. 17 - Prob. 2RQCh. 17 - Prob. 3RQCh. 17 - Prob. 4RQCh. 17 - Prob. 5RQCh. 17 - Prob. 6RQCh. 17 - What is benchmarking, and what are the two main...Ch. 17 - Prob. 8RQCh. 17 - Prob. 9RQCh. 17 - Prob. 10RQCh. 17 - Prob. 11RQCh. 17 - Prob. 12RQCh. 17 - Prob. 13RQCh. 17 - Prob. 14ARQCh. 17 - Prob. 15ARQCh. 17 - Prob. S17.1SECh. 17 - Prob. S17.2SECh. 17 - Prob. S17.3SECh. 17 - Performing vertical analysis Hoosier Optical...Ch. 17 - Prob. S17.5SECh. 17 - Prob. S17.6SECh. 17 - Use the following information for Short Exercises...Ch. 17 - Prob. S17.8SECh. 17 - Prob. S17.9SECh. 17 - Prob. S17.10SECh. 17 - Prob. S17.11SECh. 17 - Prob. S17.12SECh. 17 - Prob. S17.13SECh. 17 - Prob. S17.14SECh. 17 - Performing horizontal analysisincome statement...Ch. 17 - Prob. E17.16ECh. 17 - Prob. E17.17ECh. 17 - Prob. E17.18ECh. 17 - Prob. E17.19ECh. 17 - Prob. E17.20ECh. 17 - Prob. E17.21ECh. 17 - Prob. E17.22ECh. 17 - Prob. E17.23ECh. 17 - Prob. E17.24ECh. 17 - Prob. E17.25ECh. 17 - Prob. E17.26ECh. 17 - Prob. P17.27APGACh. 17 - Prob. P17.28APGACh. 17 - Prob. P17.29APGACh. 17 - Prob. P17.30APGACh. 17 - P17-31A Using ratios to evaluate a stock...Ch. 17 - Prob. P17.32APGACh. 17 - Prob. P17.33APGACh. 17 - Prob. P17.34BPGBCh. 17 - Prob. P17.35BPGBCh. 17 - Prob. P17.36BPGBCh. 17 - Prob. P17.37BPGBCh. 17 - Prob. P17.38BPGBCh. 17 - Prob. P17.39BPGBCh. 17 - Prob. P17A.40BPGBCh. 17 - Prob. P17.41CPCh. 17 - Prob. P17.1CPCh. 17 - Prob. 17.1DCCh. 17 - Prob. 17.1EICh. 17 - Prob. 17.1FSC
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