Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The income statement and balance sheet for Belker, Inc. are provided below. (Note that the reported figures are expressed in thousands of dollars). BELKER, INC.

image text in transcribed
image text in transcribed
image text in transcribed
The income statement and balance sheet for Belker, Inc. are provided below. (Note that the reported figures are expressed in thousands of dollars). BELKER, INC. Balance Sheets as of December 31, 2018 and 2019 (in 000s) 2018 2019 2018 Assets Liabilities and Owners' Equity Current assets Current liabilities Cash $250 $ 350 Accounts payable $ 500 $ Accounts receivable 500 450 Notes payable 900 Inventory 750 900 2019 800 700 Total $ 1,500 $ 1,700 Total Long-term debt Owners' equity Common stock Accumulated retained earnings $ 1,400 $ 1,500 $ 400 $ 200 $ 200 $ 226 500 974 Fixed assets Net plant and equipment $1,000 $ 1,200 Total Equity $ 700 $ 1.200 Total assets $2,500 $2,900 Total liabilities and owners equity $2,500 $ 2,900 2,500 BELKER, INC. 2019 Income Statement (in 000s) Sales Cost of goods sold Depreciation EBIT $ Interest paid 1,600 50 850 50 Taxable income Taxes $ 800 168 Net income 632 $ 158 Dividends Retained earnings 474 Requirement #1: Calculate each of the following ratios for Belker Inc. for 2019 only and complete the table below. (Do not round Intermediate calculations. Round your answers to 4 decimal places (e.g., 0.9173 or 2.1648). Input profit margin, return on assets, and return on equity as percentages (e.g., if the Profit Margin 0.1576. Input your answer as 15.76). 2019 a. Current ratio b. Quick ratio c. Total asset turnover d. Inventory turnover e. Total debt ratio f. Equity Multiplier g. Times interest earned ratio h. Profit margin i. Return on assets j. Return on equity times times times times times Industry Average 1.0478 0.3621 0.8117 1.5656 0.5463 2.2040 9.6172 31.58% 25.63% 56.50% times Requirement #2: Construct the DuPont Identity for Belker, Inc. Based on DuPont analysis, how would you explain the difference in the return on equity (ROE) for Belker, Inc. vs. the industry as a whole in 2019 (.e., why is the ROE for Belker higher/lower than the ROE for the average firm in the Industry)

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

Information Technology Auditing

Authors: Hall, J Scott Harr

3rd Edition

1133008046, 978-1439079119

More Books

Students also viewed these Accounting questions

Question

What is charismatic leadership. and how does it work?

Answered: 1 week ago

Question

Summarize the reactive strategy of your organization.

Answered: 1 week ago