Summer Corporation has just completed its comparative statements for the year ended December 31, year 5....
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Summer Corporation has just completed its comparative statements for the year ended December 31, year 5. At this point, certain analytical and Interpretive procedures are to be undertaken. The completed statements (summarized) are as follows: Statement of Earnings Sales revenue Cost of sales Gross profit Operating expenses (including interest on bonds) Pretax earnings Income tax expense Net earnings Statement of Financial Position Cash Accounts receivable (net) Merchandise inventory Prepayments Property, plant, and equipment (net) Accounts payable Income taxes payable Bonds payable (5% interest rate) Common shares (40,000 shares) Retained earnings *Credit sales totalled 40 percent of total sales. b$40,000 of bonds were issued on January 2, year 5. Year 5 Year 4 $960,000* $840,0002 540,000 460,000 420,000 380,000 342,000 336,000 78,000 44,000 24,000 12,000 $ 54,000 $ 13,600 84,000 50,000 $ 32,000 $ 7,800 56,000 40,000 400 200 260,000 $408,000 $ 34,000 2,000 140,000b 240,000 $344,000 $ 36,000 4,000 100,000 200,000 200,000 32,000d 4,000 $408,000 $344,000 "The market price of the stock at the end of year 5 was $18 per share. "During year 5, the company declared and paid a cash dividend of $26,000. Required: 1. Compute appropriate ratios for year 5. (Use "365" days a year. Round "Tax rate" to the nearest whole percentage. Round Intermediate calculations and other answers to 2 decimal places. Round percentage answers to 1 decimal place.) Name and Computation of the 2021 Ratio Profitability ratios Return on equity Return on assets Gross profit margin Net profit margin Earnings per share Asset turnover ratios Total asset turnover Fixed asset turnover % % % % per share Receivables turnover Average days to collect receivables Inventory turnover Average days to sell inventory times days times days Liquidity ratios Current ratio Quick ratio Cash ratio Solvency ratios Times interest earned Debt-to-equity ratio Market ratios Price/earnings ratio Dividend yield ratio times % Summer Corporation has just completed its comparative statements for the year ended December 31, year 5. At this point, certain analytical and Interpretive procedures are to be undertaken. The completed statements (summarized) are as follows: Statement of Earnings Sales revenue Cost of sales Gross profit Operating expenses (including interest on bonds) Pretax earnings Income tax expense Net earnings Statement of Financial Position Cash Accounts receivable (net) Merchandise inventory Prepayments Property, plant, and equipment (net) Accounts payable Income taxes payable Bonds payable (5% interest rate) Common shares (40,000 shares) Retained earnings *Credit sales totalled 40 percent of total sales. b$40,000 of bonds were issued on January 2, year 5. Year 5 Year 4 $960,000* $840,0002 540,000 460,000 420,000 380,000 342,000 336,000 78,000 44,000 24,000 12,000 $ 54,000 $ 13,600 84,000 50,000 $ 32,000 $ 7,800 56,000 40,000 400 200 260,000 $408,000 $ 34,000 2,000 140,000b 240,000 $344,000 $ 36,000 4,000 100,000 200,000 200,000 32,000d 4,000 $408,000 $344,000 "The market price of the stock at the end of year 5 was $18 per share. "During year 5, the company declared and paid a cash dividend of $26,000. Required: 1. Compute appropriate ratios for year 5. (Use "365" days a year. Round "Tax rate" to the nearest whole percentage. Round Intermediate calculations and other answers to 2 decimal places. Round percentage answers to 1 decimal place.) Name and Computation of the 2021 Ratio Profitability ratios Return on equity Return on assets Gross profit margin Net profit margin Earnings per share Asset turnover ratios Total asset turnover Fixed asset turnover % % % % per share Receivables turnover Average days to collect receivables Inventory turnover Average days to sell inventory times days times days Liquidity ratios Current ratio Quick ratio Cash ratio Solvency ratios Times interest earned Debt-to-equity ratio Market ratios Price/earnings ratio Dividend yield ratio times %
Expert Answer:
Answer rating: 100% (QA)
Sure lets compute the requested ratios for Year 5 1 Profitability Ratios Return on Equity ROE Net EarningsAverage Shareholders Equity x 100 ROE 540002... View the full answer
Related Book For
Financial Accounting
ISBN: 978-1259103285
5th Canadian edition
Authors: Robert Libby, Patricia Libby, Daniel Short, George Kanaan, M
Posted Date:
Students also viewed these accounting questions
-
Summer Corporation has just completed its comparative statements for the year ended December 31, 2015. At this point, certain analytical and interpretive procedures are to be undertaken. The...
-
Summer Corporation has just completed its comparative statements for the year ended December 31, 2010. At this point, certain analytical and interpretive procedures are to be undertaken. The...
-
State SQL query to satisfy the requirements below: Include the following columns: First Name Last Name Return all rows from the people table where the person's last name is between B and H. Use the...
-
Depreciation information for Buckingham Ltd. is given in BE9-4. Using the diminishing-balance method and assuming the depreciation rate is equal to one time the straight-line rate, calculate the...
-
To emphasize the importance of integrity and ethical values among all personnel or an organization, the chief executive officer? 1) Send e-mail messages to all employees, promoting ethical values. 2)...
-
For the system in Problem 6.7, how many hours of sunlight are needed to ensure that the battery bank is at \(100 \%\) charge at the end of the day assuming the same load? Problem 6.7 A PV battery...
-
Your comparison of the gross margin percent for Jones Drugs for the years 2008 through 2011 indicates a significant decline. This is shown by the following information: A discussion with Marilyn...
-
Design a simple relational database schema for a library management system, including tables for books, authors, members, and loans .
-
A wet t-shirt hung on a hanger has a total surface area of about 0.6 m2 . It loses water as follows: time (min) 0 5 33 45 weight (g) 661 640 580 553 Calculate the flux of water vapor away from the...
-
Find the determinant Det(A), Transpose (AT) and the Inverse (A-) using the adjoint method for the following matrix A = 1 1 0 1 2 -1 3 1 1 (5 Marks)
-
What are the advantages of divisionalisation?
-
Are there ever times when the task is so important that concern for the social dimension of the group must be ignored?
-
What are the disadvantages of role fixation?
-
What relationship do stability and change have in groups?
-
This is a depiction of a true storythe rise and fall of stockbroker Jordan Belfort (Leonardo DiCaprio). This movie is not for the faint at heart. There is very graphic sexual content and vulgarity....
-
A schematic catalytic cycle is shown below, based on rhodium phosphine complexes, with the ligand donor atoms denoted by P (= phosphine), and X and Y as other ligands. The local point symmetry at Rh...
-
What are the typical record-at-a-time operations for accessing a file? Which of these depend on the current file record?
-
While pursuing his undergraduate studies, Bruno Clarke needed to earn sufficient money for the coming academic year. Unable to obtain a job with a reasonable salary, he decided to try the lawn care...
-
Refer to the financial statements of Canadian Tire Corporation in Appendix A of this book. Required: 1. Does the company disclose its revenue recognition policy? What point in time does it use to...
-
A recent annual report for Boston Beer Company contained the following data for the three most recent years (in millions of U. S. dollars): Assume that all investing activities involved acquisition...
-
Describe the process of valuing the entrepreneurs ownership interest in a two-stage investment. Refer to Tables 13.10 and 13.13. Data from table 13.10 Data from table 13.13 Market potential...
-
Euro Exchange Rates. The exchange rate that we consider is the amount of euros that one can purchase for one U.S. dollar. We have \(T=699\) daily observations from the period April 1, 2005, through...
-
Evaluate the current yield curve level and structure using the following screens: a. YCRV or GC to access yield curves. b. FWCV to determine implied forward rates. c. USoo03M, USoo06M, USoo09M, and...
Study smarter with the SolutionInn App