45042241 45042248 45042240 45042254 45042252 45042250 45042249 45042251 45042259 45042242 45042243 45042244 45042255 45042262 45042256 45042264 45042260 45042265 45042245 45042253 45042257 45042247 45042246 45042263 45042258 45042261 Use the information above about Ross and answer the following question Introduction Provide a brief introduction of the company, its business model, and industry. Case 9.31 Which method, single-step or multi-step, is used in the income statement? What are the captions of the intermediate profit amounts reported by your company that are not reported by Campbell Soup Company? Calculate the gross profit ratio for each of the years reported. Briefly evaluate the trend of these results. Is operating income increasing or decreasing for the years reported? Does the company report any discontinued operations? If so, what are the effects on net income and earnings per share? Case 9.32 Which method, direct or indirect, is used in the statement of cash flows? List the principal sources and uses of cash for this firm. Evaluate the change in cash. Has the firm generated most of its cash requirements from operations, or has it borrowed extensively? Has the firm's uses of cash been balanced between investments and dividends? ---NOT REQUIRED--- Has the cash balance been increasing or decreasing? What seem to be the implications of this pattern of dividends? Case 5.37 Review the note disclosures provided in your focus company's annual report and discuss what you've learned about how your company's accounts receivable and inventory are accounted for and presented. Case 6.33 Review the note disclosures provided in your focus company's annual report and discuss what you've learned about your company's: Property, plan, and equipment is: Depreciated Accounted for and presented. Other noncurrent assets are described and reported. Case 7.33 Review the notes disclosures provided in your company's report and identify at least three items being reported as noncurrent (long-term) liabilities. Discuss what you've learned about these items and how they are presented on the balance sheet. Case 8.33 Review the notes disclosures provided in your company's report and identify at least three items being reported as stockholders' equity items. Discuss what you've learned about these items and how they are presented on the balance sheet. Case 11.15 Required: Liquidity Calculate working capital, the current ration, and the acid-test ratio as of the most recent balance sheet date. Based on your calculations in part (a), assess the company's overall liquidity position. Explain which ratios indicate particle strengths and/or weakness within the company. Assume the following industry averages: Current ratio=2.0 Acid-test ratio=1.6 Explain how working capital and the current ratio are related. Would you expect a company with a large amount of working capital to always have a high current ratio? Profitability Calculate ROI, showing margin and turnover, for the most recent year. Calculate ROE for the most recent year. Calculate the price/earnings ratios for the most recent year, using the company's year-end market price per share of common stock in the numerator and diluted earnings per share in the denominator. Calculate the dividend payout and dividend yield ratios for the most recent year. Based on the results of your calculations in parts d, e, and f, assess the company's overall profitability. Explain which ratios indicate strengths and/or weakness within the company. Assume the following industry averages: ROI = 15% Margin = 10% Turnover = 1.5 ROE = 20% Price/Earnings = 14.0 Dividend payout = 40% Dividend yield = 5% As an investor in this company's stock, would you be pleased with this year's dividend yield? How would your dividend yield "expectations" change, if at all, if the company's ROI was 5% higher? Explain. Financial leverage: Calculate the debt ratio and the debt/equity ratio as of the most recent balance sheet date. Based on the results of your calculations in part j, assess the company's overall leverage position. What would you estimate the industry average to be for the debt ratio and debt/equity? Explain. Explain the relationships between ROI and ROE to be high or low for a firm that makes substantial used of financial leverage? Activity measures: Calculate the accounts receivable turnover and number of days' sales in accounts receivable (based on 365-day year) for the most recent year. Based on your analysis in part (m), do you believe that the company is doing an effective job at managing accounts receivable? What would you estimate the industry averages to be for the accounts receivable turnover and number of days' sales in accounts receivable? Explain. Calculate the inventory turnover and number of days' sales in inventory (based on a 365-day year) for the most recent year. Based on your analysis in part (o), to what extend does the company need to be concerned about its inventory management polices? In assessing the inventory management policies, would you be more interest in knowing current ratio or acid-test ratio information? Explain. Overall assessment: Assume that you have $5,000 that you would like to invest in a single company. Evaluate the common stock of your company's financial statements, identify the five most important criteria that you would use to make your investment decision, and explain why each is important