CORPORATE FIN.(LL)-W/ACCESS >CUSTOM<
11th Edition
ISBN: 9781260269901
Author: Ross
Publisher: MCG CUSTOM
expand_more
expand_more
format_list_bulleted
Textbook Question
Chapter 3, Problem 2CQ
Industry-Specific Ratios So-called “same-store sales” are a very important measure for companies as diverse as McDonald’s and Scars. As the name suggests, examining same-store sales means comparing revenues from the same stores or restaurants at two different points in time. Why might companies focus on same-store sales rather than total sales?
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Profit margins and turnover ratios vary from one industry to another. Whatdifferences would you expect to find between a grocery chain and a steelcompany? Think particularly about the turnover ratios, the profit margin,and the DuPont equation
Profit margins and turnover ratios vary from one industry to another. What differenceswould you expect to find between the turnover ratios, profit margins, and DuPont equationsfor a grocery chain and a steel company?
Carson Electronics’ management has long viewed BGT Electronics as an industry leader and uses this firm as a model firm for analyzing its own performance. The balance sheet and income statements for the two firms are as follows:
Calculate the following ratios for both Carson and BGT:
a) Current ratio:
b) Times interest earned:
c) Inventory turnover:
Chapter 3 Solutions
CORPORATE FIN.(LL)-W/ACCESS >CUSTOM<
Ch. 3 - Financial Ratio Analysis A financial ratio by...Ch. 3 - Industry-Specific Ratios So-called same-store...Ch. 3 - Sales Forecast Why do you think most long-term...Ch. 3 - Sustainable Growth In the chapter, we used...Ch. 3 - EFN and Growth Rate Broslofski Co. maintains a...Ch. 3 - Common-Size Financials One tool of financial...Ch. 3 - Asset Utilization and EFN One of the implicit...Ch. 3 - Comparing ROE and ROA Both ROA and ROE measure...Ch. 3 - Ratio Analysis Consider the ratio EBITD/Assets....Ch. 3 - Return on Investment A ratio that is becoming more...
Ch. 3 - Use the following information to answer the next...Ch. 3 - Prob. 12CQCh. 3 - Use the following information to answer the next...Ch. 3 - Use the following information to answer the next...Ch. 3 - Use the following information to answer the next...Ch. 3 - DuPont Identity If Wilkinson, Inc., has an equity...Ch. 3 - Equity Multiplier and Return on Equity Synovec...Ch. 3 - Using the DuPont Identity Y3K, Inc., has sales of...Ch. 3 - EFN The most recent financial statements for...Ch. 3 - Sales and Growth The most recent financial...Ch. 3 - Sustainable Growth If the Hunter Corp. has a ROE...Ch. 3 - Sustainable Growth Assuming the following ratios...Ch. 3 - Calculating EFN The most recent financial...Ch. 3 - External Funds Needed Dahlia Colby, CFO of...Ch. 3 - Sustainable Growth Rate The Wintergrass Company...Ch. 3 - Return on Equity Firm A and Firm B have debt-total...Ch. 3 - Ratios and Foreign Companies Prince Albert Canning...Ch. 3 - External Funds Needed The Optical Scam Company has...Ch. 3 - Days Sales in Receivables A company has net income...Ch. 3 - Ratios and Fixed Assets The Whisenhunt Company has...Ch. 3 - Calculating the Cash Coverage Ratio Panda Inc.s...Ch. 3 - Prob. 17QPCh. 3 - Prob. 18QPCh. 3 - Prob. 19QPCh. 3 - Fixed Assets and Capacity Usage For the company in...Ch. 3 - Calculating EFN The most recent financial...Ch. 3 - Prob. 22QPCh. 3 - Prob. 23QPCh. 3 - EFN and Internal Growth Redo Problem 21 using sale...Ch. 3 - Prob. 25QPCh. 3 - Prob. 26QPCh. 3 - Prob. 27QPCh. 3 - Sustainable Growth Rate Based on the results in...Ch. 3 - Prob. 29QPCh. 3 - Prob. 30QPCh. 3 - Prob. 1MCCh. 3 - Prob. 2MCCh. 3 - Prob. 3MCCh. 3 - Prob. 4MCCh. 3 - Prob. 5MC
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Similar questions
- Use the following information to answer the questions that follow. A. Calculate the operating income percentage for each of the stores. Comment on how your analysis has changed for each store. B. Perform a vertical analysis for each store. 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? Explain.arrow_forwardPerforming vertical analysis The Klein Department Stores, Inc. chief executive officer (CEO) has asked you to compare the company’s profit performance and financial position with the averages for the industry. The CEO has given you the company’s income statement and balance sheet as well as the industry average data for retailers. Requirements Prepare a vertical analysis for Klein for both its income statement and balance sheet. Compare the company’s profit performance and financial position with the average for the industry.arrow_forwardIdentify which standard of comparison, (a) intracompany, (b) competitor, (c) industry, or (d) guidelines,best describes each of the following examples. Compare McDonald’s profit margin to the fast-food industry profit margin.arrow_forward
- Performing vertical analysis The Randall Department Stores, Inc. chief executive officer (CEO) has asked you to compare the company’s profit performance and financial position with the averages for the industry. The CEO has given you the company’s income statement and sheet as well as the industry average data for retailers. Requirements Prepare a vertical analysis for Randall for both its income statement and balance sheet. 2 Compare the company’s profit performance and financial position with the average for the industry.arrow_forwardThe ratio, Days Sales Outstanding (DSO) measures how quickly a company pays its vendors and suppliers. Select one: True False A company is using the same financial ratios to measure their performance across multiple divisions which are in different industry. This approach provides the company with the most accurate trend analysis. Select one: True False Examples of financial leverage include all of the below except for (select the one that does not apply): a. Issuing stock b. Equipment Loan c. Working Capital Line of Credit d. Business Credit Card e. A private loan from family which must be repaidarrow_forwardThe following revenue data were taken from the December 31, 2017, General Electric annual report (10-K): For each segment and each year, calculate intersegment sales (another name for transfer sales) as a percentage of total sales. Using Microsoft Excel or another spreadsheet application, create a clustered column graph to show the 2016 and 2017 percentages for each division. Comment on your observations of this data. How might a division sales manager use this data?arrow_forward
- Evaluating Turnover and Nontraditional Efficiency Ratios Across IndustriesThe following information is taken from publicly traded retailers. The data come from the balance sheet, income statement, and Item 2 on the companies’ Form 10‑K filings. Use the information to answer the requirements. Average Retail SQ # of $ millions Revenue COGS Inventory Footage (000s) Stores Autozone $11,221 $4,902 $3,913 41,066 6,202 Costco 141,576 121,715 10,437 110,700 762 Home Depot 108,203 71,043 13,337 237,700 2,287 Lowe’s 71,309 48,396 11,977 209,000 2,015 O’Reilly 9,536 4,237 3,102 38,455 5,219 Walmart 511,729 374,623 44,026 1,129,000 11,361 Requireda. Compute the days inventory outstanding (DIO) for each company.Note: Do not round until your final answer; round your final answer to the nearest whole day. DIO AUTOZONE Answer days COSTCO Answer days HOME DEPOT Answer days LOWE'S Answer days O'REILLY Answer days WALMART Answer days b. Compute…arrow_forwardJames is an executive with ABC Digital. He is looking at the company sales for that past six quarters in different regions to understand sales trends. What type of analytical framework is used in this scenario? James is an executive with ABC Digital. He is looking at the company sales for that past six quarters in different regions to understand sales trends. What type of analytical framework is used in this scenario? Predictive Analytics Descriptive Analytics Prescriptive Analytics Inferential statisticsarrow_forwardTwo companies are in the retail sales business, but their performance results are different, which is evidenced by the following data: Financial performance ratio Return on capital employed (ROCE) Return on ordinary share financing (ROSF) 30% Average debt collection period Average debt payment period Gross profit margin Net profit margin Average stock turnover period 20% 63 days 50 days 40% 10% 52 days Comp A Company B 17% 18% 21 days 45 days 15% 10% 25 days Perform the analysis of these data and describe the differences between these two companies. It is known that in one of them the work with consumers is well organised, while the other one is offering competitive prices. Which of these advantages are attributable to each company?arrow_forward
- 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…arrow_forwardActivity Ratios Provide brief definition of what Activity ratios mean to the profitability of a company. What are the differences between Apple and Samsung in relationship to the ratios? See attached for ratios Total Asset Turnover Inventory Turnover Fixed Asset turnover Receivable Turnover 3. What does it mean to the company’s profitability? Is it good or bad?arrow_forwardBased on the vertical analysis attached in the screenshot, which of the following statements is correct? a. Costs other than selling expenses (cost of goods sold and administrative expenses) improved as a percentage of sales. b. Net income as a percentage of sales increased. c. The sales promotion campaign appears to have been successful. d. Selling expenses as a percent of sales increased slightlyarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Principles of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax CollegeIntermediate Financial Management (MindTap Course...FinanceISBN:9781337395083Author:Eugene F. Brigham, Phillip R. DavesPublisher:Cengage Learning
Principles of Accounting Volume 2
Accounting
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax College
Intermediate Financial Management (MindTap Course...
Finance
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Cengage Learning
How To Analyze an Income Statement; Author: Daniel Pronk;https://www.youtube.com/watch?v=uVHGgSXtQmE;License: Standard Youtube License