Ratio from comparative and Common-Size Data. Would appreciate the help understanding it.
Chapter 13 Bonus Assignment for students Protected Insert Page Layout Formulas Data Review View Help Tell me what you want to do IEW Be carefulfiles from the Internet can contain viruses. Unless you need to edit, it's safer to stay in Protected View Enable Editing Most features are disabled because your Office product is inactive. To use for free, sign in and use the Web version. Activate fx D H C E F G Please note, the numbers in green on the right hand side of the spreadsheet are for calculation purposes only. They will Ratios from Comparative and Common-Size Data Consider the following financial statements for Nixon Company. During the year, management obtained additional bond financing to enlarge its production facilities. The plant addition produced a new high-margin product, which is supposed to improve the average rate of gross profit and return on sales. As a potential investor, you decide to analyze the financial statements: NIXON COMPANY Balance Sheets (Thousands of Dollars) Dec. 31, 2019 Dec. 31, 2018 Assets Cash Accounts receivable (net) Inventory Prepaid expenses Plant and other assets (net) Total Assets $25,000 39,000 105,000 1,500 463,500 $634,000 $18,100 21,400 72,000 4,000 427,500 $543,000 Liabilities and Stockholders' Equity Current liabilities 9% Bonds payable 8% Preferred stock, $50 par value Common stock, S10 par value Retained earnings Total Liabilities and Stockholders' Equity $80,000 187.500 60,000 225,000 81,500 $634,000 $48,000 150,000 60,000 225,000 60,000 S543,000 NIXON COMPANY Iron Catamant Prob 18.65 Chapter 13 Bonus Assignment for students (1) (Protect Insert Page Layout Formulas View Tell me what you want to do Data Review Help EW Be careful files from the Internet can contain viruses. Unless you need to edit, it's safer to stay in Protected View. Enable Editir Most features are disabled because your Office product is inactive. To use for free, sign in and use the Web version Activate G H B C E D a. 2019 2018 Current ratio: Quick ratio: Operating-cash-flow-to-current-liabilities ratio: Inventory turnover: Debt-to-equity ratio: Times-interest-earned ratio: Return on assets: Return on common stockholders' equity: b. Common-Size Percentages 2019 2018 Sales revenue Cost of goods sold Gross profit on sales Selling and administrative expenses Income before interest expense and income taxes interest expense income before income taxes Income tax expense come Chapter 13 Bonus Assignment for students i Protected Insert Page Layout Formulas Data Review View Help Tell me what you want to do IEW Be carefulfiles from the Internet can contain viruses. Unless you need to edit, it's safer to stay in Protected View. Enable Editing Most features are disabled because your Office product is inactive. To use for free, sign in and use the Web version. Activate H C D E NIXON COMPANY Income Statements (Thousands of Dollars) 2019 Sales revenue Cost of goods sold Gross profit on sales Selling and administrative expenses Income before interest expense and income taxes Interest expense Income before income taxes Income tax expense Net income $850,000 552,000 298,000 231,000 67,000 17,000 50,000 10,000 $40,000 2018 $697,500 465,000 232,500 174,000 58,500 13,500 45,000 9,000 $36,000 Other financial data (thousands of dollars): Cash provided by operating activities Preferred stock dividends $28,000 5,000 $24,000 4,800 Required a. Calculate the following for each year: current ratio, quick ratio, operating-cash-flow-to-current liabilities ratio (current liabilities were $40 million at January 1, 2018), inventory turnover inventory was 568 million at January 1, 2018), debt-to-equity ratio, times-interest-earned ratio, return on assets (total assets were $490 million at January 1, 2018), and return on common stockholders' equity (common stockholders' equity was $265 million at January 1, 2018). Round to two decimal points b. Calculate common-size percentage for each year's income statement. Round to one decimal point Prob55 a
