Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Comprehensive Ratio Analysis The Jimenez Corporation's forecasted 2019 financial statements follow, along with some industry average ratios. Jimenez Corporation: Forecasted Balance Sheet as of December

Comprehensive Ratio Analysis

The Jimenez Corporation's forecasted 2019 financial statements follow, along with some industry average ratios.

Jimenez Corporation: Forecasted Balance Sheet as of December 31, 2019

Assets
Cash $ 72,000
Accounts receivable 439,000
Inventories 894,000
Total current assets $1,405,000
Fixed assets 431,000
Total assets $1,836,000
Liabilities and Equity
Accounts payable $ 332,000
Notes payable 112,000
Accruals 158,000
Total current liabilities $ 602,000
Long-term debt 404,450
Common stock 574,840
Retained earnings 254,710
Total liabilities and equity $1,836,000

Jimenez Corporation: Forecasted Income Statement for 2019

Sales $4,290,000
Cost of goods sold (excluding depreciation) 3,580,000
Selling, general, and administrative expenses 370,320
Depreciation 159,000
Earnings before taxes (EBT) $ 180,680
Taxes (40%) 72,272
Net income $ 108,408
Jimenez Corporation: Per Share Data for 2019
EPS $ 4.71
Cash dividends per share $ 0.95
P/E ratio 4.0
Market price (average) $ 18.85
Number of shares outstanding 23,000
Industry Ratiosa
Quick ratio 1.0
Current ratio 2.7
Inventory turnoverb 7.0
Days sales outstandingc 32.0 days
Fixed assets turnoverb 13.0
Total assets turnoverb 2.6
Return on assets 9.1 %
Return on equity 18.2 %
Profit margin on sales 3.5 %
Debt-to-assets ratio 21.0 %
Liabilities-to-assets ratio 50.0 %
P/E ratio 5.0
Price/Cash flow ratio 3.5
Market/Book ratio 3.5
Notes:
aIndustry average ratios have been stable for the past 4 years.
bBased on year-end balance sheet figures.
cCalculation is based on a 365-day year.

Calculate Jimenez's 2019 forecasted ratios, compare them with the industry average data, and comment briefly on Jimenez's projected strengths and weaknesses. Assume that there are no changes from the prior period to any of the operating balance sheet accounts. Do not round intermediate calculation. Round DSO to the nearest whole number. Round the other ratios to one decimal place.

image text in transcribedplease answer the ones i got wrong in red

Current ratio Inventory turnover Days sales outstanding Fixed assets turnover Total assets turnover Return on assets Return on equity Profit margin on sales Debt ratio Liabilities-to-assets EPS Stock Price P/E ratio Price/Cash flow ratio Market/Book ratio So, the firm appears to be badly managed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Securities Trader Qualification Examination Series 57 Study Guide

Authors: Philip Martin Mccaulay

1st Edition

979-8363665240

More Books

Students also viewed these Finance questions