Maurice Tutor

(5)

$15/per page/Negotiable

About Maurice Tutor

Levels Tought:
Elementary,Middle School,High School,College,University,PHD

Expertise:
Algebra,Applied Sciences See all
Algebra,Applied Sciences,Biology,Calculus,Chemistry,Economics,English,Essay writing,Geography,Geology,Health & Medical,Physics,Science Hide all
Teaching Since: May 2017
Last Sign in: 401 Weeks Ago, 4 Days Ago
Questions Answered: 66690
Tutorials Posted: 66688

Education

  • MCS,PHD
    Argosy University/ Phoniex University/
    Nov-2005 - Oct-2011

Experience

  • Professor
    Phoniex University
    Oct-2001 - Nov-2016

Category > Accounting Posted 05 Aug 2017 My Price 15.00

Mel Filbert

Comprehensive Ratio Analysis of two Companies

P4. Mel Filbert is considering an investment in the common stock of a chain of retail department stores. She has narrowed her choice to two retail companies, Single Cor- poration and Design Corporation, whose income statements and balance sheets follow.

 

Income Statements

 

? 2b: Single asset turnover: 2.5 times

Net sales Single $12,560,000 Design $25,210,000 Costs and expenses: Cost of goods sold $ 6,142,000 $14,834,000 Selling expenses 4,822,600 7,108,200 Administrative expenses 986,000 2,434,000 Total costs and expenses $11,950,600 $24,376,200 Income from operations $ 609,400 $ 833,800 Interest expense 194,000 228,000 Income before income taxes $ 415,400 $ 605,800 Income taxes expense 200,000 300,000 Net income $ 215,400 $ 305,800 Earnings per share $ 4.31 $ 10.19 ? 3a: Single debt to equity ratio: 1.0 time

? 4b: Single cash flow to sales: 2.2%

? 5a: Single price/earnings ratio: 13.9 times

 

Cash $ 80,000 $ 192,400 Marketable securities (at cost) 203,400 84,600 Accounts receivable (net) 552,800 985,400 Inventory 629,800 1,253,400 Prepaid expenses 54,400 114,000 Property, plant, and equipment (net) 2,913,600 6,552,000 Intangibles and other assets 553,200 144,800 Total assets $4,987,200 $9,326,600 Balance Sheets Assets

 

 

Single Design

 

(Continued)

Copyright 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

 

Chapter Assignments 699

Liabilities and Stockholders’ equity

 

LO 4

? 1: Net income using FIFO and straight line: $190,800

? 1: Net income using LIFO and

double-declining-balance: $93,200

 

 

Accounts payable

$ 344,000

  

$ 572,600

Notes payable

150,000

  

400,000

Income taxes payable

50,200

  

73,400

Bonds payable

2,000,000

  

2,000,000

Common stock, $20 par value

1,000,000

  

600,000

Additional paid-in capital

609,800

  

3,568,600

Retained earnings

833,200

  

2,112,000

Total liabilities and stockholders’ equity

$4,987,200

  

$9,326,600

During the year, Single paid a total of $50,000 in dividends. The market price per share of its stock is currently $60. In comparison, Design paid a total of $114,000 in dividends, and the current market price of its stock is $76 per share. Single had net cash flows from operations of $271,500 and net capital expenditures of $625,000. Design had net cash flows from operations of $492,500 and net capital expenditures of $1,050,000. Information for prior years is not readily available. Assume that all notes payable are current liabilities and all bonds payable are long-term liabilities and that there is no change in inventory.

ReQUIReD

Conduct a comprehensive ratio analysis for each company, using the available informa- tion. Compare the results. (Round to one decimal place, and consider changes of 0.1 or less to be indeterminate.)

1. Prepare an operating asset management analysis by calculating for each company the (a) current ratio, (b) quick ratio, (c) receivables turnover, (d) days’ sales uncol- lected, (e) inventory turnover, (f) days’ inventory on hand, (g) payables turnover,

(h) days’ payable, and (i) financing period.

2. Prepare a profitability and total asset management analysis by calculating for each company the (a) profit margin, (b) asset turnover, and (c) return on assets.

3. Prepare a financial risk analysis by calculating for each company the (a) debt to equity ratio, (b) return on equity, and (c) interest coverage ratio.

4. Prepare a liquidity analysis by calculating for each company the (a) cash flow yield,

(b) cash flows to sales, (c) cash flows to assets, and (d) free cash flow.

5. Prepare an analysis of market strength by calculating for each company the (a) price/earnings (P/E) ratio and (b) dividend yield.

6. aCCoUntinG ConneCtion ? Compare the two companies by inserting the ratio calculations from 1 through 5 in a table with the following column headings: Ratio Name, Single, Design, and Company with More Favorable Ratio. Indicate in the last column which company had the more favorable ratio in each case.

7. BUSineSS appliCation ? How could the analysis be improved if information about these companies’ prior years were available?

Answers

Maurice Tutor
(5)
Status NEW Posted 05 Aug 2017 12:08 AM My Price 15.00

Hel-----------lo -----------Sir-----------/Ma-----------dam-----------Tha-----------nk -----------You----------- fo-----------r u-----------sin-----------g o-----------ur -----------web-----------sit-----------e a-----------nd -----------and----------- ac-----------qui-----------sit-----------ion----------- of----------- my----------- po-----------ste-----------d s-----------olu-----------tio-----------n.P-----------lea-----------se -----------pin-----------g m-----------e o-----------n c-----------hat----------- I -----------am -----------onl-----------ine----------- or----------- in-----------box----------- me----------- a -----------mes-----------sag-----------e I----------- wi-----------ll

Not Rated(0)