Question
Given the financial statements for Jones Corporation and Smith Corporation: JONES CORPORATION Current Assets Liabilities Cash $ 25,800 Accounts payable $ 188,000 Accounts receivable 88,700
| Given the financial statements for Jones Corporation and Smith Corporation: |
| JONES CORPORATION | |||||||
| Current Assets | Liabilities | ||||||
| Cash | $ | 25,800 | Accounts payable | $ | 188,000 | ||
| Accounts receivable | 88,700 | Bonds payable (long term) | 80,400 | ||||
| Inventory | 54,200 | ||||||
| Long-Term Assets | Stockholders' Equity | ||||||
| Gross fixed assets | $ | 578,000 | Common stock | $ | 150,000 | ||
| Less: Accumulated depreciation | 153,900 | Paid-in capital | 70,000 | ||||
| Net fixed assets* | 424,100 | Retained earnings | 104,400 | ||||
| Total assets | $ | 592,800 | Total liabilities and equity | $ | 592,800 | ||
| Sales (on credit) | $ | 1,717,000 |
| Cost of goods sold | 782,000 | |
| Gross profit | $ | 935,000 |
| Selling and administrative expense | 283,000 | |
| Depreciation expense | 53,300 | |
| Operating profit | $ | 598,700 |
| Interest expense | 10,000 | |
| Earnings before taxes | $ | 588,700 |
| Tax expense | 93,200 | |
| Net income | $ | 495,500 |
| *Use net fixed assets in computing fixed asset turnover. |
| Includes $11,100 in lease payments. |
| SMITH CORPORATION | |||||||
| Current Assets | Liabilities | ||||||
| Cash | $ | 36,100 | Accounts payable | $ | 84,700 | ||
| Marketable securities | 10,800 | Bonds payable (long term) | 251,000 | ||||
| Accounts receivable | 77,300 | ||||||
| Inventory | 75,300 | ||||||
| Long-Term Assets | Stockholders' Equity | ||||||
| Gross fixed assets | $ | 576,000 | Common stock | $ | 75,000 | ||
| Less: Accumulated depreciation | 256,700 | Paid-in capital | 30,000 | ||||
| Net fixed assets* | 319,300 | Retained earnings | 78,100 | ||||
| Total assets | $ | 518,800 | Total liabilities and equity | $ | 518,800 | ||
| *Use net fixed assets in computing fixed asset turnover. |
| SMITH CORPORATION | ||
| Sales (on credit) | $ | 1,540,000 |
| Cost of goods sold | 1,110,000 | |
| Gross profit | $ | 430,000 |
| Selling and administrative expense | 229,000 | |
| Depreciation expense | 51,700 | |
| Operating profit | $ | 149,300 |
| Interest expense | 29,500 | |
| Earnings before taxes | $ | 119,800 |
| Tax expense | 40,100 | |
| Net income | $ | 79,700 |
| Includes $11,100 in lease payments. |
| a. | Compute the following ratios. (Use a 360-day year. Do not round intermediate calculations. Input your profit margin, return on assets, return on equity, and debt to total assets answers as a percent rounded to 2 decimal places. Round all other answers to 2 decimal places.) |
| Jones Corp. | Smith Corp. | |||
| Profit margin | % | % | ||
| Return on assets (investments) | % | % | ||
| Return on equity | % | % | ||
| Receivable turnover | times | times | ||
| Average collection period | days | days | ||
| Inventory turnover | times | times | ||
| Fixed asset turnover | times | times | ||
| Total asset turnover | times | times | ||
| Current ratio | times | times | ||
| Quick ratio | times | times | ||
| Debt to total assets | % | % | ||
| Times interest earned | times | times | ||
| Fixed charge coverage | times | times | ||
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Finance With Monte Carlo
Authors: Ronald W. Shonkwiler
2013th Edition
146148510X, 978-1461485100
