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Question 4 Comparative financial statement data of Lannister Inc. are as follows: BUSI 1043 INTRODUCTION TO FINANCIAL ACCOUNTING 21 Lannister Inc. Comparative Income Statement Years
Question 4 Comparative financial statement data of Lannister Inc. are as follows: BUSI 1043 INTRODUCTION TO FINANCIAL ACCOUNTING 21 Lannister Inc. Comparative Income Statement Years Ended December 31, 2016 and 2015 WWW.YORKVILLEU.CA 2016 2015 Net sales Cost of goods sold Gross profit Operating expenses Income from operations Interest expense Income before income tax Income tax expense Net income Current assets: Cash Current receivables, net Inventories Prepaid expenses Total current assets Property, plant and equipment, net Total assets Accounts payable Other current liabilities Total current liabilities Long-term liabilities Total liabilities Common shareholders equity, no par Total liabilities and shareholders equity Other information: $687,000 375,000 312,000 129,000 183,000 37,000 146,000 36,000 $110,000 Lannister Inc. Comparative Balance Sheet December 31, 2016 and 2015 $45,000 $49,000 212,000 158,000 297,000 281,000 4,000 29,000 558,000 517,000 285,000 277,000 $843,000 $794,000 150,000 105,000 135,000 188,000 $285,000 $293,000 243,000 231,000 528,000 524,000 315,000 270,000 $843,000 $794,000 $595,000 276,000 319,000 142,000 177,000 45,000 132,000 51,000 $81,000 $200,000 181,000 $700,000 112,000 199,000 2016 2015 2014 Market price of Lannister common stock: $102.17 at December 31, 2016; and $77.01 at December 31, 2015. Common shares outstanding: 18,000 during 2016 and 17,500 during 2015. All sales on credit. 1. Compute the following ratios for 2016 and 2015: Current ratio. Quick ratio (acid test). Receivables turnover and days sales outstanding (rounded to the nearest whole day). Inventory turnover and days inventory outstanding (rounded to the nearest whole day). Accounts payable turnover and days payable outstanding (rounded to the nearest whole day). Cash conversion cycle (in days). Times-interest-earned ratio. Return on assets (use DuPont analysis). Return on common shareholders equity (use DuPont analysis). Earnings per share of common stock. Price/earnings ratio. Decide whether (a) Lannisters financial position improved or deteriorated during 2014 and (b) the investment attractiveness of Lannisters common stock appears to have increased or decreased.
Question 4
Comparative financial statement data of Lannister Inc. are as follows:
BUSI 1043 INTRODUCTION TO FINANCIAL ACCOUNTING 21
Lannister Inc.
Comparative Income Statement Years Ended December 31, 2016 and 2015
WWW.YORKVILLEU.CA
2016
2015
Net sales
Cost of goods sold
Gross profit
Operating expenses Income from operations Interest expense
Income before income tax Income tax expense
Net income
Current assets: Cash
Current receivables, net Inventories
Prepaid expenses
Total current assets
Property, plant and equipment, net Total assets
Accounts payable
Other current liabilities
Total current liabilities
Long-term liabilities
Total liabilities
Common shareholders equity, no par Total liabilities and shareholders equity
Other information:
$687,000 375,000 312,000 129,000 183,000 37,000 146,000 36,000 $110,000
Lannister Inc. Comparative Balance Sheet December 31, 2016 and 2015
$45,000 $49,000 212,000 158,000 297,000 281,000 4,000 29,000 558,000 517,000 285,000 277,000 $843,000 $794,000 150,000 105,000 135,000 188,000 $285,000 $293,000 243,000 231,000 528,000 524,000 315,000 270,000 $843,000 $794,000
$595,000 276,000 319,000 142,000 177,000 45,000 132,000 51,000 $81,000
$200,000 181,000
$700,000 112,000
199,000
2016
2015
2014
Market price of Lannister common stock: $102.17 at December 31, 2016; and $77.01 at December 31, 2015.
Common shares outstanding: 18,000 during 2016 and 17,500 during 2015. All sales on credit.
1.
Compute the following ratios for 2016 and 2015:
Current ratio.
Quick ratio (acid test).
Receivables turnover and days sales outstanding (rounded to the nearest whole day). Inventory turnover and days inventory outstanding (rounded to the nearest whole day). Accounts payable turnover and days payable outstanding (rounded to the nearest whole day).
Cash conversion cycle (in days).
Times-interest-earned ratio.
Return on assets (use DuPont analysis).
Return on common shareholders equity (use DuPont analysis). Earnings per share of common stock.
Price/earnings ratio.
Decide whether (a) Lannisters financial position improved or deteriorated during 2014 and (b) the investment attractiveness of Lannisters common stock appears to have increased or decreased.
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