Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Income Statement Data for 2020 Al Othaim Farm Markets Co Superstores Net Sales Cost of Goods Sold $63,200 $380,000 41,200 28,462 Selling and administrative

image text in transcribedimage text in transcribed

Income Statement Data for 2020 Al Othaim Farm Markets Co Superstores Net Sales Cost of Goods Sold $63,200 $380,000 41,200 28,462 Selling and administrative expense 13,201 72,920 Interest expense 625 1,862 Other Income (Expense) -89 -399 Income Tax Expense Net Income 1,289 6,982 $2,258 $13,985 Balance Sheets Data (End of 2020) Current Assets $19,862 $49,762 Non Current Assets 25,600 125,201 Total Assets Current Liabilities $42,982 $162,500 $10,890 $52,652 Long-term Debt 16,952 41,986 Total stockholders' Equity 14,950 72,101 Total Liabilities and stockholders' Equity $42,500 $171,250 Beginning-of-2020 Balances Total Assets $45,210 $165,200 Total stockholders' Equity 12,920 64,952 Current Liabilities 11,300 56,321 Total Liabilities 29,965 98,214 Other Data Average Net Accounts Receivable $7,820 $3,982 Average Inventory 7,020 34,012 Net Cash Provided by Operating Activities 5,689 27,842 Capital Expenditures Dividends 1,625 11,982 503 4,125 Required: Compare the Solvency, Liquidity and Profitability position of the two companies by Calculating current ratio, Account Receivable Turnover, Average Collection Period (In Days) (365 days / Account Receivable Turnover), Inventory Turnover, Days in Inventory, Current Cash Debt Coverage (net cash provided by operating activities / average current liability), Profit Margin, Asset Turnover, Return on Assets, Return on Common Stockholder's Equity, Debt to Assets, Times Interest Earned, Cash Debt Coverage (net cash provided by operating activities / average total liability) and free Cash Flow (net cash provided by operating activities - Capital expenditures - cash dividends). Then state which company you think is better in short-term and why (Interpretation) and under the assumption that each company's stock can be purchased at book value, state which company's stock you think is better to invest and why (Interpretation).

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

Contemporary Business Mathematics with Canadian Applications

Authors: S. A. Hummelbrunner, Kelly Halliday, K. Suzanne Coombs

10th edition

133052311, 978-0133052312

More Books

Students also viewed these Finance questions

Question

15. What are the four steps in taking a physical inventory?

Answered: 1 week ago