Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Which of the following items that can be characterized for this Tech Company? (It may be more than one option). EXPLAIN (and report your calculations)

image text in transcribed

Which of the following items that can be characterized for this Tech Company? (It may be more than one option).

EXPLAIN (and report your calculations)

  1. High debt & unprofitable

  2. Low debt & unprofitable

  3. Decreasing profit margin

  4. High Asset Utilization Performance

  5. Low Asset Utilization Performance

  6. Increasing sales with a decreasing sales growth rate

  7. 1, 3 and 5 characterize New Tech Company

NEW TECH COMPANY Income Statement Sales Cost of goods sold Depreciation General, sales & admin expenses Taxes Net Income 2010 2011 100 110 50 51 20 20 70 65 2012 120 52 20 60 10 10 -36 -50 2010 2011 40 45 60 55 2012 40 60 Balance Sheet Current Assets Property, plant & equipment Total Assets Current Liabilities Long-Term Liabilities Equity Total Liabilities & Equity 100 100 10 50 100 10 50 100 100 35 15 50 100 2012 INDUSTRY AVERAGE RATIOS 2010 CR (Current Ratio) 1.5 DR (Debt Ratio)=TL/TA 60% TAT (Total Asset Turnover) PM (Profit Margin) | 4% Sales Growth 3% 2011 1.5 60% 2.2 60% 2.5 3% 5% 2.50 % 25% Profit Growth 5% 20%

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

Internal Auditing Assurance And Consulting Services

Authors: Kurt F. Reding, Paul J. Sobel, Urton L. Anderson, Michael J. Head, Sridhar Ramamoorti, Mark Salamasick, Contributing Writer, Cris Ridd, Richard Tuschman

1st Edition

0894136100, 978-0894136108

More Books

Students also viewed these Accounting questions

Question

Why We Form Relationships Managing Relationship Dynamics?

Answered: 1 week ago