Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

I have attached my question, please try to provided adequate work so I can follow and learn the steps. Thank You! Data for Campsey Computer

image text in transcribed

I have attached my question, please try to provided adequate work so I can follow and learn the steps.

Thank You!

image text in transcribed Data for Campsey Computer Company and its industry averages follow. a. Calculate the indicated ratios for Campsey. b. Construct the DuPont equation for both Campsey and the industry. c. Outline Campsey's strengths and weaknesses as revealed by your analysis. d. Suppose Campsey had doubled its sales as well as its inventories, accounts receivable, and common equity during the year. How would that information affect the validity of your ratio analysis? (Hint: Think about averages and the effects of rapid growth on ratios if averages are not used. No calculations are needed.) Campsey Computer Company: Balance Sheet as of December 31 Cash $ 77,500 Accounts payable $129,000 Receivables 336,000 Notes payable 84,000 Inventories 241,500 Other current liabilities 117,000 Total current assets $655,000 Total current liabilities $330,000 Net fixed assets 292,500 Long-term debt 256,500 Common equity Total assets $947,500 Total liabilities and equity $947,500 361,000 Campsey Computer Company: Income Statement for Year Ended December 31 Sales $1,607,500 Cost of goods sold (1,353,000) Gross profit Fixed operating expenses except depreciation $ 254,500 ( 143,000) Earnings before interest, taxes, depreciation, and amortization (EBITDA) Depreciation Earnings before interest and taxes (EBIT) Interest Earnings before taxes (EBT) $ 111,500 ( 41,500) $ 70,000 ( 24,500) $ 45,500 Taxes (40%) Net income Ratio Campsey Current ratio Industry Average 2.0x Days sales outstanding 35.0 days Inventory turnover 5.6x Total assets turnover 3.0x Net profit margin 1.2% Return on assets (ROA) 3.6% Return on equity (ROE) 9.0% Debt ratio 60.0% ( 18,200) $ 27,300

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered 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

A Pathway To Introductory Statistics

Authors: Jay Lehmann

1st Edition

0134107179, 978-0134107172

Students also viewed these Finance questions

Question

Show enthusiasm for the position (but not too much).

Answered: 1 week ago

Question

BN 0 2 " loop - ( ) 1 = A [ 1 ] 2 ( i = 2 [ A ] ) 3 (

Answered: 1 week ago