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Comprehensive Ratio Analysis Data for Lozano Chip Company and its industry averages follow. Lozano Chip Company: Balance Sheet as of December 31, 2019 (Thousands of
Comprehensive Ratio Analysis
Data for Lozano Chip Company and its industry averages follow.
Lozano Chip Company: Balance Sheet as of December 31, 2019 (Thousands of Dollars) | ||||
Cash | $ 220,000 | Accounts payable | $ 600,000 | |
Receivables | 1,575,000 | Notes payable | 100,000 | |
Inventories | 1,155,000 | Other current liabilities | 540,000 | |
Total current assets | $2,950,000 | Total current liabilities | $1,240,000 | |
Net fixed assets | 1,325,000 | Long-term debt | 400,000 | |
Common equity | 2,635,000 | |||
Total assets | $4,275,000 | Total liabilities and equity | $4,275,000
|
Lozano Chip Company: Income Statement for Year Ended December 31, 2019 (Thousands of Dollars) | |
Sales | $7,500,000 |
Cost of goods sold | 6,375,000 |
Selling, general, and administrative expenses | 929,000 |
Earnings before interest and taxes (EBIT) | $ 196,000 |
Interest expense | 40,000 |
Earnings before taxes (EBT) | $ 156,000 |
Federal and state income taxes (25%) | 39,000 |
Net income | $ 117,000 |
Calculate the indicated ratios for Lozano. Do not round intermediate calculations. Round your answers to two decimal places.
Ratio | Lozano | Industry Average | |
Current assets/Current liabilities | 2 | ||
Days sales outstanding (365-day year) | 35 days | ||
COGS/Inventory | 6.7 | ||
Sales/Fixed assets | 12.1 | ||
Sales/Total assets | 3 | ||
Net income/Sales | % | 1.2 % | |
Net income/Total assets | % | 3.6 % | |
Net income/Common equity | % | 9 % | |
Total debt/Total assets | % | 10 % | |
Total liabilities/Total assets | % | 60% |
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