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Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281

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BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281
Textbook Problem
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Ratios Analyses: McCormick Refer to the information for McCormick above. Additional information for 20X3 it as follows (amounts in millions):

Chapter 4, Problem 16P, Ratios Analyses: McCormick Refer to the information for McCormick above. Additional information for , example  1

Required:

Next Level Compute the following for 20X3. Provide a brief description of what each ratio reveals about McCormick

  1. 1. return on common equity
  2. 2. debt-to-assets
  3. 3. debt-toequity
  4. 4. current
  5. 5. quick (McCormick uses cash and equivalents, short-term securities and receivables in their quick ratio calculation.)
  6. 6. inventory turnover days
  7. 7. accounts receivable turnover days
  8. 8. accounts payable turnover days
  9. 9. operating cycle (in days)
  10. 10. total asset turnover

Use the following information for 14-17 and 14-18:

The Hershey Company is one of the world’s leading producers of chocolates, candies, and confections. It sells chocolates and candies, mints and gums, baking ingredients, toppings, and beverages. Hershey’s consolidated balance sheets for 20X2 and 20X3 follow.

Chapter 4, Problem 16P, Ratios Analyses: McCormick Refer to the information for McCormick above. Additional information for , example  2

Requirement 1:

To determine

Determine the return on common equity ratio of C&C Incorporation for 20X3.

Explanation

Determine the return on common equity ratio of C&C Incorporation for 20X3:

Step 1: Calculate the average total common stockholders’ equity.

Average total commonstockholders’ equity}={[Total common stocholders' equity, ending+Total common stocholders' equity, beginning+]2}={[$1,947.7million+$1,700.2million]2}=$3,647

Requirement 2:

To determine

Determine the debt-to-assets ratio of C&C Incorporation for 20X3.

Requirement 3:

To determine

Determine the debt-to-equity ratio of C&C Incorporation for 20X3.

Requirement 4:

To determine

Determine the current ratio of C&C Incorporation for 20X3.

Requirement 5:

To determine

Determine the quick ratio of C&C Incorporation for 20X3.

Requirement 6:

To determine

Determine the inventory turnover in days of C&C Incorporation for 20X3.

Requirement 7:

To determine

Determine the accounts receivable turnover in days of C&C Incorporation for 20X3.

Requirement 8:

To determine

Determine the accounts payable turnover in days of C&C Incorporation for 20X3.

Requirement 9:

To determine

Determine the operating cycle in days of C&C Incorporation for 20X3.

Requirement 10:

To determine

Determine the total assets turnover ratio of C&C Incorporation for 20X3.

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