1. Calculate and comment ratios: current ratio, quick ratio, receivables turnover, average collection period, inventory turnover, inventory...
Fantastic news! We've Found the answer you've been seeking!
Question:
1. Calculate and comment ratios: current ratio, quick ratio, receivables turnover, average collection period, inventory turnover, inventory turnover days and return on equity.
2. According to your opinion, describe the role and importance of receivables factoring.
Transcribed Image Text:
1) Below financial statements of Company A is given: COMPANY A - Balance Sheet (end of vear) Liabilities and Owners’ Equity Current liabilities Accounts payable Notes payable Accrued expenses Assets Current assets 65,000,000 22,500,000 15,000,000 6,000,000 1,500,000 Cash 5,000,000 15,000,000 27,500,000 15,000,000 2,500,000 Short term investments Accounts receivable Inventory Prepaid expenses Long term liabilities Bonds payable Mortage payable 40,000,000 20,000,000 Fixed assets 60,000,000 20,000,000 Plant and equipment (at cost)100,000,000 Less: Depreciation Total Assets (40,000,000) 62,500,000 Owners' equity Common stock 125,000,000 10,000,000 (50,000 shares) Retained earnings Total liabilities and net worth 52,500,000 125,000,000 COMPANY A- Income Statement (end of year) 150,000,000 Sales Less: Cost of goods sold Gross profits Less: Selling and administrative expense Less: Depreciation expense Operating profit Less: Interest expense Earnings before taxes Less: Corporate taxes (at 35%) Net income after taxes Please, calculate and comment ratios: current ratio, quick ratio, receivables turnover, average collection period, inventory turnover, inventory turnover days and return on equity. (100,000,000) 50,000,000 (20,000,000) (5,000,000) 25,000,000 (4,000,000) 21,000,000 (7,350,000) 13,650,000 2) According to your opinion, describe the role and importance of receivables factoring. 1) Below financial statements of Company A is given: COMPANY A - Balance Sheet (end of vear) Liabilities and Owners’ Equity Current liabilities Accounts payable Notes payable Accrued expenses Assets Current assets 65,000,000 22,500,000 15,000,000 6,000,000 1,500,000 Cash 5,000,000 15,000,000 27,500,000 15,000,000 2,500,000 Short term investments Accounts receivable Inventory Prepaid expenses Long term liabilities Bonds payable Mortage payable 40,000,000 20,000,000 Fixed assets 60,000,000 20,000,000 Plant and equipment (at cost)100,000,000 Less: Depreciation Total Assets (40,000,000) 62,500,000 Owners' equity Common stock 125,000,000 10,000,000 (50,000 shares) Retained earnings Total liabilities and net worth 52,500,000 125,000,000 COMPANY A- Income Statement (end of year) 150,000,000 Sales Less: Cost of goods sold Gross profits Less: Selling and administrative expense Less: Depreciation expense Operating profit Less: Interest expense Earnings before taxes Less: Corporate taxes (at 35%) Net income after taxes Please, calculate and comment ratios: current ratio, quick ratio, receivables turnover, average collection period, inventory turnover, inventory turnover days and return on equity. (100,000,000) 50,000,000 (20,000,000) (5,000,000) 25,000,000 (4,000,000) 21,000,000 (7,350,000) 13,650,000 2) According to your opinion, describe the role and importance of receivables factoring.
Expert Answer:
Answer rating: 100% (QA)
Quick assets Current assets Inventory Prepaid expenses 65000000150000002500000 47500000 Current ratio Current assets Current liabilities 6500000022500000 289 to 1 Quick ratio Quick assets current liab... View the full answer
Related Book For
Posted Date:
Students also viewed these accounting questions
-
Exercise 5-18A Calculate receivables ratios (LO5-8) Below are amounts (in millions) from three companies' annual reports. Beginning Accounts Receivable Ending Accounts Receivable $2,712 6,444 615...
-
Discuss the role and importance of creativity in advertising. Do you think advertising agencies often emphasize creativity at the expense of developing ads that can help generate sales for a product...
-
Calculate UTX's days sales outstanding and inventory turnover ratio s for each year 2010-2012.
-
The CFO of the Jordan Microscope Corporation intentionally misclassified a downstream transportation expense in the amount of $575,000 as a product cost in an accounting period when the company made...
-
Multiple Choice Questions 1. A couple has written a will that leaves part of their money to a trust fund. The income from this trust will benefit the surviving spouse until death, with the principal...
-
a. If the Friendlys in Problem 7 were to use leftover apples to feed livestock, at an estimated cost savings worth $0.08 per apple in revenue, how would this affect the model and solution? b. Instead...
-
The statement "Amounts due to vendors should be accurately and promptly classified, summarized, and reported" might serve as a control objective in which of the following transaction cycles? (a)...
-
De la Renta Chocolate Company produces chocolate bars. The primary materials used in producing chocolate bars are cocoa, sugar, and milk. The standard costs for a batch of chocolate (4,800 bars) are...
-
Provide a two-paper-report in which you analyze the relationships within a health care system that are necessary to achieve an organizational goal, explain how the health care system can serve as the...
-
? Dean and Ellen Price are married and have a manufacturing business. They bought a piece of business equipment (7-year personal property) on 4/1/2017 for $50,000. Use half-year convention to...
-
With a good discussion,how can decision analysis methods apply to systems engineering problems? And What is the main takeaway from the article? Choose one of the decision analysis tools and then...
-
4-2,6.1, 10} and == and B = {2, 10, 11}. Find AU B. A =
-
A large corporation finds that its Information Technology systems across all 9 departments are often failing. It is obvious that new software and hardware need to be installed if the company is not...
-
( I NEED THIS CASE IN IRAC FORM) State Farm Mutual Auto Ins. Co. v. AndersonAnnotate this Case 70 N.J. Super. 520 (1961) 176 A.2d 23 STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, STATE FARM LIFE...
-
While technology offers distinct advantages, some associations have encountered challenges with its application, especially on how an association interacts with its members.What are some of the...
-
A composite material is to be made of alternating sheets of polyethylene (core matrix) and aluminum (reinforcement). The individual materials (polyethylene and aluminum) have elastic moduli of 1 and...
-
Examples of this include golf clubs, skis, beverages, auto parts, and services sold by the firm.? Facilitating goods Explicit services Information Supporting facility Implicit services
-
The first law of thermodynamics is sometimes whimsically stated as, You cant get something for nothing, and the second law as, You cant even break even. Explain how these statements could be...
-
Working capital investment is 25% of the anticipated first year sales for Wallys Waffle House. The first-year sales are currently projected at $4,300,000. The incremental cash flow (not including...
-
Stan is expanding his business and will sell common stock for the needed funds. If the current risk-free rate is 4% and the expected market return is 12%, what is the cost of equity for Stan if the...
-
Determine the nominal rates for the three countries listed if they have the following inflation rates and the real rate the world over is 1.25%. Canada: inflation is 4.5%. Switzerland: inflation is...
-
What accounting procedures must be completed before the partnership liquidation process begins?
-
Scott Badger and Maxine Giesen are partners in a business. On December 31 of the current year, the partners equities are Scott, \($60,000.00\) and Maxine, \($90,000.00.\) The net income for the year...
-
Maria Delgado and Oren Kelso are partners in a business. Statement paper, page 15 of a general journal, and a portion of the partnership's completed work sheet for the year ended December 31 of the...
Study smarter with the SolutionInn App