FINANCIAL ACCOUNTING
6th Edition
ISBN: 9781618533111
Author: DYCKMAN
Publisher: Cambridge Business Publishers
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Chapter 1, Problem 47CP
a.
To determine
Calculate the return on equity of Company G and company N for the year 2017.
b.
To determine
Calculate the debt-to equity ratio of Company G and company N for the year 2017.
c.
To determine
Prepare an income statement of Company G and Company N for the year 2017, and calculate the gross profit as a percentage of sales revenue.
d.
To determine
Compare company G and company N and indicate the factors that might cause the differences in the computed ratios.
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A company’s comparative statements are given below. Please conduct the following analyses:
c. Calculate the three profitability ratios for year 2017 and show how ROE can be derived from the DuPont formula for this company.
d. What do the analyses tell you about the company’s financial performance?
a) Calculate the following ratios for 2016 and 2015, showing detailed calculations as to how you arrive at each number.
A ROE
B Gross profit margin
C Total asset turnover
D Inventory turnover
E Current ratio
F Debt-to-equity
G Interest coverage ratio.
b) Using the financial statements and the ratios calculated above (and any other ratios you like to calculate), discuss the performance of Cobham PLC in 2016.
c) Critically discuss the need for the public limited companies to prepare a Statement of Cash Flows and explain the usefulness of the information contained therein from the perspective of a financial analyst.
You are provided with the Income Statement and the Balance Sheet of HTS software, Inc. for 2011.
Required:
(b) Analyze the current financial position for the company from a time series and cross section viewpoint.
(c) Break your analysis into an evaluation of the firm’s liquidity, activity, debt, profitability and market ratios.
Historical and Industry Average Ratios
HTS Software , Inc.
Ratio
2010
2011
Industry2011
Current Ratio
2.6
2.08
2.7
Quick Ratio
1.8
1.32
1.75
Inventory Turnover
4.5
6
4.7
Average Collection Period
40days
9.125
42 days
Total Asset Turnover
1.2
1.69
1
Debt Ratio
20%
28.2%
21%
Times Interest Earned
9
5.9%
8.9
Gross Profit Margin
43%
42.8%
44%
Operating Profit Margin
30%
25.5%
32%
Net Profit Margin
20%
17%
21%
Return on total assets
12%
4.11%
13%
Return on Equity
Price/Earnings Ratio
15%
7.3
19%
4.4
16%
8…
Chapter 1 Solutions
FINANCIAL ACCOUNTING
Ch. 1 - Prob. 1MCCh. 1 - Prob. 2MCCh. 1 - Prob. 3MCCh. 1 - Prob. 4MCCh. 1 - Prob. 5MCCh. 1 - Prob. 1QCh. 1 - Prob. 2QCh. 1 - Prob. 3QCh. 1 - Prob. 4QCh. 1 - Prob. 5Q
Ch. 1 - Prob. 6QCh. 1 - Prob. 7QCh. 1 - Prob. 8QCh. 1 - Prob. 9QCh. 1 - Prob. 10QCh. 1 - Prob. 11QCh. 1 - Prob. 12QCh. 1 - Prob. 13QCh. 1 - Prob. 14QCh. 1 - Prob. 15QCh. 1 - Prob. 16QCh. 1 - Prob. 17QCh. 1 - Prob. 18QCh. 1 - Prob. 19MECh. 1 - Prob. 20MECh. 1 - Prob. 21MECh. 1 - Prob. 24MECh. 1 - Prob. 25MECh. 1 - Prob. 26MECh. 1 - Prob. 27ECh. 1 - Prob. 28ECh. 1 - Prob. 29ECh. 1 - Prob. 30ECh. 1 - Prob. 31ECh. 1 - Prob. 32ECh. 1 - Prob. 33ECh. 1 - Prob. 34ECh. 1 - Prob. 35ECh. 1 - Prob. 36PCh. 1 - Prob. 37PCh. 1 - Prob. 38PCh. 1 - Prob. 39PCh. 1 - Prob. 40PCh. 1 - Prob. 41PCh. 1 - Prob. 42PCh. 1 - Prob. 43PCh. 1 - Prob. 44PCh. 1 - Prob. 45PCh. 1 - Prob. 46CPCh. 1 - Prob. 47CPCh. 1 - Prob. 48CPCh. 1 - Prob. 49CPCh. 1 - Prob. 50CP
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