Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Compare Operating Characteristics Across Industries Following are selected income statement and balance sheet data for companies in different industries. $ millions Sales Cost of Goods
Compare Operating Characteristics Across Industries
Following are selected income statement and balance sheet data for companies in different industries.
$ millions Sales Cost of Goods Sold Net Income Assets Liabilities Stockholders Equity
Target $ $ $ $ $ $
Nike
HarleyDavidson
Abbott Laboratories
Required
a Compute the gross profitsales net incomesales net incomestockholders equity, and liabilitiesstockholders equity ratios for each company.
$ millions Numerator : Denominator Gross ProfitSales
Target Answer
: Answer
Nike Answer
: Answer
HarleyDavidson Answer
: Answer
Abbott Laboratories Answer
: Answer
$ millions Numerator : Denominator Net incomeSales
Target Answer
: Answer
Nike Answer
: Answer
HarleyDavidson Answer
: Answer
Abbott Laboratories Answer
: Answer
$ millions Numerator : Denominator Net incomeStockholders equity
Target Answer
: Answer
Nike Answer
: Answer
HarleyDavidson Answer
: Answer
Abbott Laboratories Answer
: Answer
$ millions Numerator : Denominator LiabilitiesStockholders equity
Target Answer
: Answer
Nike Answer
: Answer
HarleyDavidson Answer
: Answer
Abbott Laboratories Answer
: Answer
b Profit margin Net income Sales is a function of both gross profit margin and expense control. Abbott Labs' profit margin is the Answer
of the companies in this sample, due to its Answer
gross profit margin.
c Which company reports the highest ratio of net income to equity?
Answer
enjoys the highest return on equity measured as net income to equity followed by Answer
whose equity is relatively low due to recent stock buybacks. Stock buybacks Answer
equity.
d Which company has financed itself with the highest percentage of liabilities to equity?
Answer
has the highest proportion of debt in its capital structure at least in part because the company has Answer
common stock over the past five years.
Step 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