I would like these later this afternoon, thank you
Exercise 12-5 Evaluate risk ratios [LO3]
The 2012 income statement of Adrian Express reports sales of
$ 16 million, cost of goods sold of $9.6 million, and net income of $ 1. 6 million. Balance sheet information is provided in the following table. All amounts are in thousands. |
ADRIAN EXPRESS
Balance Sheets
December 31, 2012 and 2011
($ in 000s)
2012
2011
Assets
Current assets
:
Cash
600
$
760
Accounts receivable
1,400
1,000
Inventory
1,800
1,400
Long-term assets
4,800
4,240
Total assets
$
8,600
$
7,400
Liabilities and Stockholders’ Equity
Current liabilities
$
2,020
$
1,660
Long-term liabilities
2,300
2,400
Common stock
2,000
2,000
Retained earnings
2,280
1,340
Total liabilities and stockholders’ equity
$
8,600
$
7,400
Industry averages for the following four risk ratios are as follows: |
Average collection period |
25 days |
|
Average days in inventory |
60 days |
|
Current ratio |
2 to 1 |
|
Debt to equity ratio |
50% |
Required: |
1. |
Calculate the four risk ratios listed above for Adrian Express in 201 2. (Use 365 days in a year. Round your answers to 1 decimal place. Omit the “%” sign in your response.) |
Risk Ratios |
|||||||||
days |
|||||||||
to 1 |
|||||||||
% |
2. |
Do you think the company is more risky or less risky than the industry averages? |
||
The 2012 income statement of Adrian Express reports sales of $16 million, cost of goods sold of $9.6 million, and net income of $1.6 million. Balance sheet information is provided in the following table. All amounts are in thousands.
ADRIAN EXPRESS |
|||||
($ in 000s) |
2012 |
2011 |
|||
Cash |
|||||
Accounts receivable |
1,400 |
||||
Inventory | |||||
Total assets | |||||
Total liabilities and stockholders’ equity |
Industry averages for the following four risk ratios are as follows:
Gross profit ratio |
45 |
|||||
Return on assets |
25 | |||||
Profit margin |
15 |
|||||
Asset turnover |
2.5 |
times |
||||
Return on equity |
35 |
Required:
1. |
Calculate the five profitability ratios listed above for Adrian Express. (Round your answers to the nearest whole number. Omit the “%” sign in your response.) |
Profitability Ratios |
|||
% |
|||
times |
|||
2. |
Do you think the company is more profitable or less profitable than the industry averages? |
|
The balance sheet for Plasma Screens Corporation and additional information are provided below. |
PLASMA SCREENS CORPORATION |
|||
1 12,000 |
120,000 |
||
7 8,000 |
92,000 |
||
9 5,000 |
80,000 |
||
Investments |
4,000 |
2,000 |
|
Long-term assets: |
|||
Land |
480,000 |
||
Equipment |
90,000 |
670,000 |
|
Less: Accumulated depreciation |
(428,000) |
(268,000) |
|
1,131,000 |
1,17 6,000 |
||
Liabilities and Stockholders’ Equity | |||
Current liabilities: |
|||
Accounts payable |
99,000 |
85,000 |
|
Interest payable |
6,000 | 12,000 | |
Income tax payable |
8,000 | 5,000 | |
Long-term liabilities: |
|||
No tes payable |
100,000 |
200,000 |
|
Stockholders’ equity: |
|||
Common stock |
700,000 |
||
Retained earnings |
218,000 |
174,000 |
|
1,131,000 |
Additional information for 2012: |
|
Net income is $69,000. |
|
Sales on account are $1,520,000. |
|
3. |
Cost of goods sold is $1,160,000. |
references
Section Break |
Exercise 12-7 Calculate risk ratios [LO3] |
3.
value:
2.00 points
Exercise 12-7 Part 1
Required:
Calculate the following risk ratios for 2012 (Round your answers to 1 decimal place. Omit the “%” sign in your response): |
Risk Ratios | ||
a. |
Receivables turnover ratio |
|
b. |
Inventory turnover ratio |
|
c. |
Current ratio | |
d. |
Acid-test ratio |
|
e. |
Debt to equity ratio |
check my work
eBook Link
View Hint #1
references
Worksheet |
Difficulty: Hard |
||||
Exercise 12-7 Part 1 |
Learning Objective: 12-03 Use ratios to analyze a company’s risk. |
4.
value:
1.00 points
Exercise 12-7 Part 2
When we compare two companies, can one have a higher current ratio while the other has a higher acid-test ratio? |
Yes |
No |
Exercise 12-9 Calculate profitability ratios [LO4]
[The following information applies to the questions displayed below.]
The following condensed information is reported by Sporting Collectibles. |
2013 |
2012 | |||
Income Statement Information |
||||
Sales revenue |
10,400,000 |
8,400,000 |
||
Cost of goods sold |
6, 800,000 |
5, 900,000 |
||
Net income |
360,000 |
248,000 |
||
Balance Sheet Information |
||||
Current assets |
1,600,000 |
1,500,000 |
||
2,200,000 |
1,900,000 |
|||
Total assets |
3,800,000 |
3,400,000 |
||
1,200,000 |
900,000 | |||
800,000 | ||||
300,000 |
||||
Total liabilities and stockholders’ equity |
3,800,000 |
references
Exercise 12-9 Calculate profitability ratios [LO4] |
5.
value:
2.00 points
Exercise 12-9 Part 1
Required:
Calculate the following profitability ratios for 2013 (Round your answers to 1 decimal place. Omit the “%” sign in your response): |
Profitability Ratios |
Gross profit ratio |
Return on assets |
Profit margin |
Asset turnover |
Return on equity |
check my work
eBook Link View Hint #1
references
Exercise 12-9 Part 1 |
Learning Objective: 12-04 Use ratios to analyze a companys profitability. |
6.
value:
1.00 points
Exercise 12-9 Part 2
Determine the amount of dividends paid to shareholders in 2013. (Omit the “$” sign in your response.) |
The amount of dividends paid |
$ |
check my work
eBook Link View Hint #1
references
Exercise 12-9 Part 2 |