Based on the financial statements calculate the (1) efficiency ratios, (2) liquidity ratios, (3) leverage ratios, and (4) profitability ratios for KPC Corporation for this year. Where data is available, also calculate ratios for last year. Use a 360-day year. All sales are on credit to business customers. Assume an income tax rate of 30 percent. Net SalesCost of goods soldGross profitOperating expensesOperating incomeInterest expenseProfit before taxesTaxesNet incomeKPC's CorporationVertical Analysis Income StatementFor this year and last yearThis YearAmountPercent680,000100.0%410,00060.3%270,00039.75190,00027.9%80,00011.8%1.0%73,00010.7%22,0003.2%51,0007.5%7,000Last YearAmount600,000330,000270,000192,00078,0002,00076,00022,80053,200Percent100.0%55.0%45.0%32.0%13.0%0.3%12.7%3.8%8.9% KPC's CorporationVertical Analysis Balance SheetFor this year and last yearThis YearAmountPercent50,0008.8%80,00014.0%180,00031.6%310,00034.4%300,00052.6%-40.0000.0%570,000100.0%100,00017.5%70,00012.3%80,00014.0%250,00043.9%130,00022.8%190,00033.3%320,000 56.1%570,000 100.0%ASSETSCashAccounts receivableInventoriesTotal Current AssetsPlant & equipmentLess accumulated depreciationTotal AssetsLIABILITIES AND EQUITYAccounts payableAccrued liabilitiesMortgage payableTotal LiabilitiesStockholder's EquityCommon stockRetained earningsTotal Stockholder's EquityTotal Liabilities and EquityLast YearAmount40,00060,000110,000210,000260,000-20.000450,000150,00050,000200.00090,000160,000250,000450,000Percent8.9%13.3%24.4%46.7%57.8%-4.4%100.0%33.3%11.1%0.0%44.4%20.0%35.6%55.65100.0%

A financial ratio, also known as an accounting ratio, is the comparison of two numerical numbers…

Based on the financial statements calculate the (1) efficiency ratios, (2) liquidity ratios, (3) leverage ratios, and (4) profitability ratios for KPC Corporation for this year. Where data is available, also calculate ratios for last year. Use a 360-day year. All sales are on credit to business customers. Assume an income tax rate of 30 percent.

Based on the financial statements calculate the (1) efficiency ratios, (2) liquidity ratios, (3) leverage ratios, and (4) profitability ratios for KPC Corporation for this year. Where data is available, also calculate ratios for last year. Use a 360-day year. All sales are on credit to business customers. Assume an income tax rate of 30 percent.

Financial Reporting, Financial Statement Analysis and Valuation

8th Edition

ISBN:9781285190907

Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Chapter4: Profitability Analysis

Section: Chapter Questions

Problem 23PC

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