Using the financial statements for the Snider Corporation,calculate the 13 basic ratios found in the chapter.
SNIDER CORPORATION
Balance Sheet
December 31, 2013
Assets
Current assets:
Cash $ 51,800
Marketable securities 24,200
Accounts receivable (net)174,000
Inventory 227,000
Total currentassets $ 477,000
Investments 63,500
Plant and equipment. $ 646,000
Less: Accumulated depreciation246,000
Net plant and equipment 400,000
Total assets $ 940,500
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 91,100
Notes payable 73,400
Accrued taxes 18,400
Total currentliabilities $ 182,900
Long-term liabilities:
Bonds payable 156,700
Total liabilities $ 339,600
Stockholders' equity
Preferred stock, $50 par value $100,000
Common stock, $1 par value80,000
Capital paid in excess of par190,000
Retained earnings 230,900
Total stockholders'equity $ 600,900
Total liabilities and stockholders' equity $940,500
SNIDER CORPORATION
Income Statement
For the Year Ending December 31, 2013
Sales (on credit) $ 2,034,000
Cost of goods sold 1,308,000
Gross profit $ 726,000
Selling and administrative expenses 488,000 *
Operating profit (EBIT) $ 238,000
Interest expense 34,900
Earnings before taxes (EBT) $ 203,100
Taxes 89,300
Earnings after taxes (EAT) $ 113,800
*Includes $36,600 in lease payments.
Using the above financial statements for the Snider Corporation,calculate the following ratios.
a.
Profitability ratios. (Do not round intermediate calculations.Input your answers as a percent rounded to 2 decimal places.)
Profitability Ratios
Profit margin %
Return on assets (investment) %
Return on equity %
b.
Assets utilization ratios. (Do not round intermediatecalculations. Round your answers to 2 decimal places.)
Assets Utilization Ratios
Receivable turnover times
Average collection period days
Inventory turnover times
Fixed asset turnover times
Total asset turnover times
c.
Liquidity ratios. (Do not round intermediate calculations. Roundyour answers to 2 decimal places.)
Liquidity Ratios
Current ratio times
Quick ratio times
d.
Debt utilization ratios. (Do not round intermediatecalculations. Input your debt to total assets answer as a percentrounded to 2 decimal places. Round your other answers to 2 decimalplaces.)
Debt Utilization Ratios
Debt to total assets %
Times interest earned times
Fixed charge coverage times
Using the financial statements for the Snider Corporation,calculate the 13 basic ratios found in the chapter.
SNIDER CORPORATION
Balance Sheet
December 31, 2013
Assets
Current assets:
Cash $ 51,800
Marketable securities 24,200
Accounts receivable (net)174,000
Inventory 227,000
Total currentassets $ 477,000
Investments 63,500
Plant and equipment. $ 646,000
Less: Accumulated depreciation246,000
Net plant and equipment 400,000
Total assets $ 940,500
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 91,100
Notes payable 73,400
Accrued taxes 18,400
Total currentliabilities $ 182,900
Long-term liabilities:
Bonds payable 156,700
Total liabilities $ 339,600
Stockholders' equity
Preferred stock, $50 par value $100,000
Common stock, $1 par value80,000
Capital paid in excess of par190,000
Retained earnings 230,900
Total stockholders'equity $ 600,900
Total liabilities and stockholders' equity $940,500
SNIDER CORPORATION
Income Statement
For the Year Ending December 31, 2013
Sales (on credit) $ 2,034,000
Cost of goods sold 1,308,000
Gross profit $ 726,000
Selling and administrative expenses 488,000 *
Operating profit (EBIT) $ 238,000
Interest expense 34,900
Earnings before taxes (EBT) $ 203,100
Taxes 89,300
Earnings after taxes (EAT) $ 113,800
*Includes $36,600 in lease payments.
Using the above financial statements for the Snider Corporation,calculate the following ratios.
a.
Profitability ratios. (Do not round intermediate calculations.Input your answers as a percent rounded to 2 decimal places.)
Profitability Ratios
Profit margin %
Return on assets (investment) %
Return on equity %
b.
Assets utilization ratios. (Do not round intermediatecalculations. Round your answers to 2 decimal places.)
Assets Utilization Ratios
Receivable turnover times
Average collection period days
Inventory turnover times
Fixed asset turnover times
Total asset turnover times
c.
Liquidity ratios. (Do not round intermediate calculations. Roundyour answers to 2 decimal places.)
Liquidity Ratios
Current ratio times
Quick ratio times
d.
Debt utilization ratios. (Do not round intermediatecalculations. Input your debt to total assets answer as a percentrounded to 2 decimal places. Round your other answers to 2 decimalplaces.)
Debt Utilization Ratios
Debt to total assets %
Times interest earned times
Fixed charge coverage times
Related questions
Selected year-end financial statements of Cabot Corporationfollow. (All sales were on credit; selected balance sheet amountsat December 31, 2015, were inventory, $55,900; total assets,$249,400; common stock, $85,000; and retained earnings,$48,092.)
| CABOT CORPORATION Income Statement For Year Ended December 31, 2016 | ||
| Sales | $ | 453,600 |
| Cost of goods sold | 297,550 | |
| Gross profit | 156,050 | |
| Operating expenses | 98,800 | |
| Interest expense | 3,900 | |
| Income before taxes | 53,350 | |
| Income taxes | 21,492 | |
| Net income | $ | 31,858 |
| CABOT CORPORATION Balance Sheet December 31, 2016 | ||||||
| Assets | Liabilitiesand Equity | |||||
| Cash | $ | 18,000 | Accounts payable | $ | 19,500 | |
| Short-term investments | 9,400 | Accrued wages payable | 3,800 | |||
| Accounts receivable, net | 33,600 | Income taxes payable | 3,300 | |||
| Notes receivable (trade)* | 6,000 | Long-term note payable,secured | ||||
| Merchandise inventory | 36,150 | by mortgage on plant assets | 66,400 | |||
| Prepaid expenses | 2,500 | Common stock | 85,000 | |||
| Plant assets, net | 152,300 | Retained earnings | 79,950 | |||
| Total assets | $ | 257,950 | Total liabilities andequity | $ | 257,950 | |
* These are short-term notes receivable arising from customer(trade) sales.
Required:
Compute the following: (1) current ratio, (2) acid-test ratio,(3) days' sales uncollected, (4) inventory turnover, (5) days'sales in inventory, (6) debt-to-equity ratio, (7) times interestearned, (8) profit margin ratio, (9) total asset turnover, (10)return on total assets, and (11) return on common stockholders'equity. (Do not round intermediatecalculations.)
| * These are short-term notes receivable arising from customer(trade) sales.
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| 1. Analyze the IncomeStatement using vertical and horizontal computations. What do thesestatements tell you? | |||||
| 2. Analyze calucating the following ratiosfor 2016 only. | |||||
| a. Current Ratio | |||||
| b. Quick Ratio | |||||
| c. Accounts ReceivableTurnover (assuming all sales are credit sales) | |||||
| d. Days Sales Outstanding (Days inAccounts Receivable) | |||||
| e. Inventory Turnover | |||||
| f. Days in Inventory | |||||
| Show All Computations | |||||
| ConsolidatedIncome Statement | |||||
| 2016 | 2015 | 2014 | |||
| Year ended December 31, | |||||
| In thousands ofdollars except for per share amounts | |||||
| Earnings | |||||
| Revenues: | |||||
| Net sales | $2,004,719 | $1,937,021 | $1,835,987 | ||
| Investment and otherincome | 18,636 | 17,153 | 14,614 | ||
| Totalrevenues | $2,023,355 | $1,954,174 | $1,850,601 | ||
| Costs and expenses: | |||||
| Cost of goods sold | $848,363 | $847,366 | $814,483 | ||
| Costs (gain) related tofactory closure | |||||
| and sale | -10,404 | 3,300 | 10,436 | ||
| Selling, distribution andgeneral | |||||
| administrative | 743,902 | 708,310 | 656,473 | ||
| Interest | 615 | 958 | 1,097 | ||
| Total costand expenses | $1,582,476 | $1,559,934 | $1,482,489 | ||
| Earnings before incometaxes | $ 440,879 | $ 394,240 | $ 368,112 | ||
| Income taxes | 136,378 | 122,614 | 128,840 | ||
| Net earnings | $ 304,501 | $ 271,626 | $ 239,272 | ||
| ConsolidatedBalance Sheets | |||||
| at December 31 | 2016 | 2015 | |||
| ASSETS | In thousands ofdollars | ||||
| Current assets: | |||||
| Cashand cash equivalents | $214,572 | $206,627 | |||
| Short-term investments, at amortizedcost | 137,112 | 120,728 | |||
| Accounts receivable, net | 194,877 | 175,967 | |||
| Inventory | 256,108 | 247,392 | |||
| Otherprepaid assets | 25,376 | 30,538 | |||
| Deferred income taxes--current | 15,027 | 16,421 | |||
| Total currentassets | $843,072 | $797,673 | |||
| Marketable equity securities,at fair value | 39,888 | 26,375 | |||
| Deferred charges and otherassets | 92,183 | 59,566 | |||
| Deferred incometaxes--noncurrent | 25,522 | 29,038 | |||
| Property, plant, andequipment, at cost: | |||||
| Land | $36,013 | $26,298 | |||
| Buildings and building equipment | 310,212 | 277,808 | |||
| Machinery and equipment | 642,556 | 566,766 | |||
| $988,781 | $870,872 | ||||
| Lessaccumulated depreciation | 468,691 | 440,398 | |||
| $520,090 | $430,474 | ||||
| Total assets | $1,520,755 | $1,343,126 | |||
| LIABILITIES AND STOCKHOLDERSâEQUITY | |||||
| 2012 | 2011 | ||||
| Current liabilities: | |||||
| Accounts payable | $ 76,691 | $ 71,001 | |||
| Accrued expenses | 67,848 | 78,378 | |||
| Dividends payable | 23,222 | 22,034 | |||
| Incomeand other taxes payable | 49,491 | 53,460 | |||
| Deferred income taxes--current | 1,374 | 943 | |||
| Total currentliabilities | $ 218,626 | $ 225,816 | |||
| Deferred incometaxes--noncurrent | $ 40,312 | $ 30,874 | |||
| Other noncurrentliabilities | 104,885 | 101,057 | |||
| Stockholders' equity: | |||||
| Preferred stock--no par, Auth. 20,000shares; | |||||
| Issued0 | |||||
| Commonstock--no par, Auth. 400,000 | |||||
| shares; Issued 2012: 93,007;2011: 92,545 | $ 12,401 | $ 2,339 | |||
| ClassB common--conv. Auth. 80,000 shares; | |||||
| Issued 2012: 23,214; 2011:23,676 | 3,095 | 3,157 | |||
| Additional paid-in capital | 272 | 226 | |||
| Retained earnings | 1,184,617 | 1,032,139 | |||
| Foreign currency translationadjustment | -61,339 | -65,034 | |||
| Unrealized holding gains on marketableequity | |||||
| securities | 24,698 | 25,915 | |||
| Commonstock in treasury, at cost | |||||
| (2012: 111 shares; 2011: 252shares) | (6,712) | (13,363) | |||
| Total stockholders'equity | $1,157,032 | $ 985,379 | |||
| Totalliabilities and stockholders' equity | $1,520,855 | $1,343,126 | |||
XYZ Company - Balance Sheet As of12/31/2014 | ||||||||
Assets | ||||||||
Current Assets | ||||||||
Cash | $ 50,000 | |||||||
Accounts Receivable | $ 35,000 | |||||||
Total Current Assets | $85,000 | |||||||
Long-term Investments | ||||||||
Investments in Hokie Co. - AFS | $25,000 | |||||||
Property Plant and Equipment | ||||||||
Printing Equipment | $100,000 | |||||||
less Accumulated Depreciation | $ (40,000) | $60,000 | ||||||
Building | $ 110,000 | |||||||
less Accumulated Depreciation | $ (3,667) | $106,333 | ||||||
Intangible Assets | ||||||||
Trademark | $10,000 | |||||||
Total Assets | $ 286,333 | |||||||
Liabilities and Stockholdersâ Equity | ||||||||
Current Liabilities | ||||||||
Accounts Payable | $115,000 | |||||||
Unearned Revenue | $45,000 | |||||||
Total Current Liabilities | $160,000 | |||||||
Total Liabilities | $ 160,000 | |||||||
Stockholder's Equity | ||||||||
Capital Stock: | ||||||||
Common Stock ($1 par value 10,000 shares issued) | $10,000 | |||||||
Additional Paid in Capital | $50,000 | |||||||
Total Paid in Capital | $ 60,000 | |||||||
Retained Earnings | $ 66,333 | |||||||
Total Stockholder's Equity | $126,333 | |||||||
Total Liabilities and Stockholder's Equity | $286,333 | |||||||
The Following Events Happened in 2015 | ||||||||
1. On Jan. 1 XYZ Co. issued1000 shares of 6% $10 par preferred stock for $20,000. | ||||||||
2. XYZ Co. had $150,000 insales ($100,000 cash and $50,000 on account). | ||||||||
3. On Jan. 1 XYZ. paid$20,000 to rent a building for the next 12 months | ||||||||
4. XYZ purchased suppliesfor $10,000 on account | ||||||||
5. XYZ Co. collected $35,000in cash for settlement of outstanding accounts receivable | ||||||||
6. XYZ Co. provided servicesto earn all unearned revenue in 2015. | ||||||||
7. At the end of the yearonly $2000 of supplies remained | ||||||||
8. On 12-31 XYZ Companydeclared and paid preferred dividends | ||||||||
Other Information: | ||||||||
The Building has a useful life of 10 years and a salvage valueof 10,000. The company uses straight linedepreciation. | ||||||||
The Printing Equipment has a useful life of 10 years and asalvage value of 50,000. The company uses straight linedepreciation. | ||||||||
XYZ Co's Income Tax Rate is 30 percent and taxes will not bepaid until 2016. | ||||||||
1:What would XYZ Company report for revenue onthe 2015 Income Statement?
2:What would XYZ Company report for total operatingexpenses on the 2015 Income Statement?
3:What would XYZ Company report for Net Incomeon the 2015 Income Statement?
4: What would XYZ Company report for total currentassets on the 2015 Balance Sheet?
5: What would XYZ Company report for totalliabilities on the 2015 Balance Sheet?
6: What would XYZ Company report for additional paid incapital for preferred stock on the 2015 Balance Sheet?
7: What would XYZ Company report for total stockholders'equity on the 2015 Balance Sheet?
8: After closing entries, howdoes Event #2 affect stockholders' equity?
Event #2: XYZ Co. had $150,000 in sales ($100,000 cash and$50,000 on account).
9: After closing, how does Event #6 affect the BalanceSheet?
Event #6: Blazer Co. provided services to earn allunearned revenue in 2015.
10: After closing entries, how doesEvent #7 affect the Balance Sheet?
Event #7: At the end of the year only $2000 of suppliesremained
