Connect Access Card for Financial Accounting: Information and Decisions
Connect Access Card for Financial Accounting: Information and Decisions
8th Edition
ISBN: 9781259662966
Author: John J Wild
Publisher: McGraw-Hill Education
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Computing rate of return on total assets Barot’s 2018 financial statements reported the following items—with 2017 figures given for comparison: Net income for 2018 was $3,910, and interest expense was $240. Compute Barot’s rate of return on total assets for 2018. (Round to the nearest percent.)
Computing and Interpreting Financial Statement Ratios Following are selected ratios of Norfolk Southern for 2018 and 2017. Return on Assets (ROA) Component 2018 2017 Profitability (Net income/Sales) 25.3% 53.2% Productivity (Sales/Average assets) 0.338 0.319   a. Was the company profitable in 2018?Answer b. Was the company more profitable in 2018 or 2017?Answer c. Is the change in productivity a positive or negative development?Answer d. Compute the company’s ROA for 2018 and for 2017. Note: Round answers to one decimal places (example: 10.4%).    ROA 2018 Answer 2017 Answer   e. From the information provided, which of the following best explains the change in ROA during 2018? Answer
8. Trend Ratios, Application of some Financial Ratios and their Interpretation Some of the balance sheet and income statement figures of Sapphire Mfg. CO. for 2016, 2017 and 20181 are as follows. 2018 P30,000 2016 2017 Quick assets P40,000 P48,000 65,000 25,000 80,000 50,000 Current assets 50,000 40,000 110,000 200,000 Investments 160,000 135,000 Plants, property and equipment, net Total assets 250,000 265,000 Current liabilities 45,000 50,000 100,000 75,000 Long Term debt Total stockholders' equity 40,000 50,000 105,000 125,000 125,000 Total liabilities and stockholders' Equity 200,000 400,000 240,000 250,000 265,000 Sales 375,000 500,000 Cost of goods sold Operating expenses (including Depreciation of P10,000) 255,000 290,000 110,000 95,000 105,000 Net income 50,000 50,000 130,000 a) Compute for the trend ratios based on the above given data and give your interpretation of the 2017 and 2018 figures.
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