Accounting Question

Ratio Answer

Sheet

1 TIMES” MAKE SURE YOU ROUND TO TWO DECIMAL PLACES. IF THE ANSWER IS “45.05%” THIS ANSWER WOULD BE ROUNDED TO 4 DECIMAL PLACES AS IT EQUALS .4

.

Ratio Ratio

Answer

Complete the ten ratios below.

: 1

times

%

Memo Questions (answer in a word document and in memo format according to the syllabus):

1) What do the liquidity, profitability, and solvency ratios reveal about the financial position of the company?

2) Which users may be interested in each type of ratio?

3) What does the collected data reveal about the performance and position of the company?

ROUND YOUR ANSWERS TO TWO DECIMAL PLACES EXCEPT FOR ANSWERS THAT ARE PERCENTAGES–THEY SHOULD BE ROUNDED TO 4 DECIMAL PLACES. FOR EXAMPLE, IF THE ANSWER IS “1. Save Time On Research and Writing Hire a Pro to Write You a 100% Plagiarism-Free Paper. Get My Paper

0

505

Numerator

Denominator

Expression

LIQUIDITY:

Current Ratio

Acid Quick Ratio

Receivables turnover

Inventory turnover

PROFITABILITY:

Asset turnover

Profit Margin

Return on Assets

Return on Equity

SOLVENCY:

Debt to Total Assets

Times Interest Earned Ratio

Balance Sheet

$

$

$

$

$

505

0 0

07

Other

$ 23,109 $ 23,215

	Company C
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(in millions)
	February 3,		January 28,
	2011		2010
ASSETS
Current assets:
Cash and cash equivalents																				$	7,042	4,747
Short-term investments	2,016	5,060
Accounts receivable, net	4,089	3,563
Financing receivables, net	1,363	985
Inventories	576	459
	Other	2,620	2,083
Total current assets	17,706	16,897
Property, plant, and equipment, net	2,005	1,691
Investments	2,691	4,294
Long-term financing receivables, net	325	199
Other non-current assets	382	134
Total assets		23,109		23,215
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	9,840	8,895
Accrued and other	6,087	5,241
Total current liabilities	15,927	14,136
Long-term debt	504
Other non-current liabilities	2,549	2,089
Total liabilities	18,980	16,730
Stockholders’ equity:
Preferred stock and capital in excess of $.01 par value; shares issued and outstanding: none
Common stock and capital in excess of $.01 par value; shares authorized: 7,000; shares issued: 2,818 and 2,769, respectively	9,540	8,195
Treasury stock, at cost; 488 and 284 shares, respectively	–	180	-10,758
Retained earnings	12,746	9,174
Other comprehensive loss	-103	-82
-47	-44
Total stockholders’ equity	4,129	6,485
Total liabilities and stockholders’ equity

Inc Stmt

Company C

February 3, January 28,

2011 2010

$

$

$

463

3,544

180

$

$

$

$

$

$

$

$

$

Basic

Diluted

CONSOLIDATED STATEMENTS OF INCOME
(in millions, except per share amounts)
Fiscal Year Ended
January 30,
2009
Net revenue	55,908	49,205	41,444
Cost of revenue	45,958	40,190	33,892
Gross margin	9,950	9,015	7,552
Operating expenses:
Selling, general, and administrative	5,140	4,298		3,544
Research, development, and engineering		463	464
Total operating expenses	5,603	4,761	4,008
Operating income	4,347	4,254
Investment and other income, net	227	191
Income before income taxes	4,574	4,445	3,724
Income tax provision	1,002	1,402	1,079
Net income	3,572	3,043	2,645
Earnings per common share:
	Basic	1.49	1.21	1.03
	Diluted	1.46	1.18	1.01
Weighted average shares outstanding:
2,403	2,509	2,565
2,449	2,568	2,619
Interest expense for this company is $28 million in FY February 2011.