Answered step by step
Verified Expert Solution
Question
1 Approved Answer
answer choices for PART J drop box #1 - Our House Inc Design Time Corps... d rop box #2- higher than that, lower than that...
answer choices for PART J drop box #1- Our House Inc Design Time Corps... drop box #2- higher than that, lower than that... drop box #3- Design Time or Our House appears to be in slightly better shape
please answer all requirements correctly its for an important assignment I will rate good thank you!
Assume you are purchasing an investment and decide to invest in a company in the home remodeling business. You narrow the choice to Our House, Inc., or Design Time Corp. You assemble the following data: (Click the icon to view the income statement data.) (Click the icon to view data at end of current year.) (Click the icon to view data at beginning of current year.) (Click the icon to view more information.) Read the requirement a. Quick ratio Select the formula and then enter the amounts to compute the quick ratio for each company. (Round the ratios to two decimal places, X.XX.) )/ Quick ratio OH, Inc. ( )/ ( )/ DT, Corp + b. Debt ratio Select the formula and then enter the amounts to compute the debt ratio for each company. (Round the ratios as percentages rounded to the nearest hundredth percent, X.XX%.) Debt ratio OH, Inc. % DT, Corp % c. Interest coverage ratio Select the formula and then enter the amounts to compute the interest coverage ratio for each company. (Round the ratios to two decimal places.) Interest coverage ratio OH, Inc. times DT, Corp times d. Accounts receivable turnover Select the formula and then enter the amounts to compute the accounts receivable turnover ratio for each company. (Round the ratios to two decimal places.) Accounts receivable turnover OH, Inc. times DT, Corp. times e. Inventory turnover Select the formula and then enter the amounts to compute the inventory turnover for each company. (Round the ratios to two decimal places.) Inventory turnover OH, Inc. times DT, Corp. times f. Total asset turnover Select the formula and then enter the amounts to compute the total asset turnover for each company. (Round the ratios to two decimal places.) Total asset turnover OH, Inc. times DT, Corp. times g. Return on assets Select the formula and then enter the amounts to compute the return on assets for each company. (Round the ratios as percentages rounded to the nearest hundredth percent, X.XX%.) = Return on assets OH, Inc. DT, Corp h. Return on equity Select the formula and then enter the amounts to compute the retum on equity for each company. (Round the ratios as percentages rounded to the nearest hundredth percent, X.XX%.) = Return on equity OH, Inc. % DT, Corp. i. Earnings per share Select the formula and then enter the amounts to compute earnings per share (EPS) for each company. (Round EPS to two decimal places.) = Earnings per share OH, Inc. DT, Corp. j. Price-earings ratio Select the formula and then enter the amounts to compute the price-earnings (PE) ratio for each company. (Round the PE ratio to two decimal places.) Price-earnings ratio OH, Inc. DT, Corp Which company's stock best fits your investment strategy? The common stock seems to best fit the investment strategy. Its price-earnings ratio is V based on the results of the ratio analysis performed i Data Table i Data Table More Info ss. Y r.) Selected income statement data for the current year. Selected balance sheet and market price data at the end of the current year: Our House, Inc Design Time, Corp. Your investment strategy is to purchase the stock of the company that has a low price-earnings ratio but seems to be in good shape financially. Assume that you analyzed all other factors and your decision depends on the results of the ratio analysis to be performed $ $ $ $ Our House, Inc. 262,000 131,000 99.000 18,000 44,000 Net sales Cost of goods sold EBIT Interest expense Net income Design Time, Corp. 289.000 173.000 101,000 14.000 67,000 s tot 0 Requirement 22,000 27,000 30,000 69,000 7.000 59,000 35,000 22,000 71,500 4.000 Data Table Current assets: Cash Short-term investments Accounts receivables, net Inventory Prepaid expenses Total current assets Total assets Total current liabilities Total liabilities Common stock, $2.00 par, 1,000 shares $4.00 par. 3.000 shares Total stockholders' equity ........ Market price per share of common stock 155,000 266,000 200,000 103,000 191,500 259,000 168,000 90,000 2,000 Selected balance sheet data at the beginning of the current year: 1. Compute the following ratios for both companies for the current year and decide which company's stock best fits your investment strategy. Assume all sales are on credit. (Abbreviations used: A/R = accounts receivable. Avg average, CS = common stock, EBIT = earnings before interest and taxes, Mkt = market, SE = stockholders' equity, and ST = short-term.) a. Quick ratio b. Debt ratio c. Interest coverage ratio d. Accounts receivable turnover e. Inventory turnover Total asset turnover g. Return on assets h. Return on equity i. Earnings per share Price-earnings ratio ... $ $ f. Our House, Inc. 33,500 81,000 254,000 Design Time, Corp. 27,500 69,000 204,000 2.000 12,000 163,000 65 169,000 81 $ Accounts receivable, net Inventory Total assets Common stock, $2.00 par, 1,000 shares ... $4.00 par, 3,000 shares ............... Total stockholders' equity $ j. Print Done 12.000 120,000 159.000 Print DoneStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started