Listed is the 2018 income statement and other financial data for Perez & Serrano Co. Perez...
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Listed is the 2018 income statement and other financial data for Perez & Serrano Co. Perez & Serrano Co. Income Statement for the year ending December 31, 2018 (in thousands of dollars, except EPS, DPS, BVPS, MVPS) $4980 Net sales Cost of goods sold Gross profits 2246 $2734 Other operating expenses Earnings before interest, taxes and 125 $2609 depreciation Depreciation 200 Earnings before interest and taxes $2409 (EBIT) Interest expenses 315 Earnings before taxes (EBT) Taxes Net income Preferred stock dividends Net income available for common stock $2094 764 $1330 $ 60 $1270 Common stock dividends 395 Addition to retained earnings $ 875 Per (common) share data Earnings per share (EPS) Dividends per share (DPS) $6.34 $1.98 Book value per share (BVPS) Market value (price) per share $19.745 $26.850 Other financial Data for Perez & Serrano Co. Times Interest earned = (interest expense/EBIT) Net profit margin = (Net profit/sales) Operating profits margin = (EBIT/sales) Gross profit margin = (sales - cost of goods sold/sales) Industry 7.25 18.75% 42.02% 49.16% REQUIRED Part I Using Excel or any other electronic sheet; prepare the Common Sized Income Statement for Perez & Serrano Co. Part II Compute the followings profitability ratios, compare with the industry and evaluate the performance of the Perez & Serrano, Inc. using the scale: better, on par or worse. a. Gross profits ratio = b. Operating profits margin = c. Net profit margin = Part III If the gross profits ratio for Perez & Serrano Co. is worse than the industry's gross profit ratio. You are the financial analyst for Perez & Serrano Co. and the management ask you a recommendation for improve that ratio. What would you recommend? Why? Listed is the 2018 income statement and other financial data for Perez & Serrano Co. Perez & Serrano Co. Income Statement for the year ending December 31, 2018 (in thousands of dollars, except EPS, DPS, BVPS, MVPS) $4980 Net sales Cost of goods sold Gross profits 2246 $2734 Other operating expenses Earnings before interest, taxes and 125 $2609 depreciation Depreciation 200 Earnings before interest and taxes $2409 (EBIT) Interest expenses 315 Earnings before taxes (EBT) Taxes Net income Preferred stock dividends Net income available for common stock $2094 764 $1330 $ 60 $1270 Common stock dividends 395 Addition to retained earnings $ 875 Per (common) share data Earnings per share (EPS) Dividends per share (DPS) $6.34 $1.98 Book value per share (BVPS) Market value (price) per share $19.745 $26.850 Other financial Data for Perez & Serrano Co. Times Interest earned = (interest expense/EBIT) Net profit margin = (Net profit/sales) Operating profits margin = (EBIT/sales) Gross profit margin = (sales - cost of goods sold/sales) Industry 7.25 18.75% 42.02% 49.16% REQUIRED Part I Using Excel or any other electronic sheet; prepare the Common Sized Income Statement for Perez & Serrano Co. Part II Compute the followings profitability ratios, compare with the industry and evaluate the performance of the Perez & Serrano, Inc. using the scale: better, on par or worse. a. Gross profits ratio = b. Operating profits margin = c. Net profit margin = Part III If the gross profits ratio for Perez & Serrano Co. is worse than the industry's gross profit ratio. You are the financial analyst for Perez & Serrano Co. and the management ask you a recommendation for improve that ratio. What would you recommend? Why?
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Answer rating: 100% (QA)
Part I Common Sized Income Statement for Perez Serrano Co To prepare the Common Sized Income Statement we divide each line item by the Net Sales and multiply by 100 to express the values as percentage... View the full answer
Related Book For
Intermediate Accounting IFRS
ISBN: 978-1119372936
3rd edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
Posted Date:
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