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Compute the following for year 2: 2-f. Return on assets. Assume that long-term debt increased to $36,810 in month 1 of year 2. (Round intermediate calculations to 3 decimal places and percentage answer to 2 decimal places (i.e., 0.1243 should be entered as 12.43).) 2-g. Return on equity. (Round percentage answer to 2 decimal places (i.e., 0.1243 should be entered as 12.43).) 2-h. Financial leverage percentage. Did borrowing from creditors benefit shareholders? (Round intermediate calculations and final answer to 2 decimal places.)

Compute the following for year 2: 2-f. Return on assets. Assume that long-term debt increased to $36,810 in month 1 of year 2. (Round intermediate calculations to 3 decimal places and percentage answer to 2 decimal places (i.e., 0.1243 should be entered as 12.43).) 2-g. Return on equity. (Round percentage answer to 2 decimal places (i.e., 0.1243 should be entered as 12.43).) 2-h. Financial leverage percentage. Did borrowing from creditors benefit shareholders? (Round intermediate calculations and final answer to 2 decimal places.)

Managerial Accounting
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter16: Financial Statement Analysis
Section: Chapter Questions
Problem 4PA: Measures of liquidity, solvency, and profitability The comparative financial statements of Marshall...
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Compute the following for year 2:

2-f. Return on assets. Assume that long-term debt increased to $36,810 in month 1 of year 2. (Round intermediate calculations to 3 decimal places and percentage answer to 2 decimal places (i.e., 0.1243 should be entered as 12.43).)

2-g. Return on equity. (Round percentage answer to 2 decimal places (i.e., 0.1243 should be entered as 12.43).)

2-h. Financial leverage percentage. Did borrowing from creditors benefit shareholders? (Round intermediate calculations and final answer to 2 decimal places.)

 

The comparative financial statements prepared at December 31, year 2, for Goldfish Company showed the following summarized data: Statement of Earnings Sales revenue Cost of sales Gross margin Operating expenses and interest expense Earnings before income taxes Income tax expense Net earnings Statement of Financial Position Cash Accounts receivable (net) Inventory Property, plant, and equipment (net) Current liabilities (no interest) Non-current liabilities (10% interest) Common shares (6,000 shares) Retained earningst Year 2 $379,790* 321,700 58,090 39, 220 18,870 6,690 $ 12,180 $ 4,170 15,990 46,050 27,430 $ 93,640 Year 1 $320,000 270,000 50,000 35,000 15,000 5,100 $ 9,900 $ 8,200 19,000 40,000 23,000 $ 90,200 $ 15,350 $ 18,500 36,810 35,900 24,000 24,000 17,480 11,800 $ 93,640 $ 90,200 *One-third was credit sales. +During Year 2, cash dividends amounting to $6,500 were declared and paid.
Transcribed Image Text:The comparative financial statements prepared at December 31, year 2, for Goldfish Company showed the following summarized data: Statement of Earnings Sales revenue Cost of sales Gross margin Operating expenses and interest expense Earnings before income taxes Income tax expense Net earnings Statement of Financial Position Cash Accounts receivable (net) Inventory Property, plant, and equipment (net) Current liabilities (no interest) Non-current liabilities (10% interest) Common shares (6,000 shares) Retained earningst Year 2 $379,790* 321,700 58,090 39, 220 18,870 6,690 $ 12,180 $ 4,170 15,990 46,050 27,430 $ 93,640 Year 1 $320,000 270,000 50,000 35,000 15,000 5,100 $ 9,900 $ 8,200 19,000 40,000 23,000 $ 90,200 $ 15,350 $ 18,500 36,810 35,900 24,000 24,000 17,480 11,800 $ 93,640 $ 90,200 *One-third was credit sales. +During Year 2, cash dividends amounting to $6,500 were declared and paid.
Required: 1. Present component percentages for Year 2 only. (Input all amounts as positive values. Round the final answers to the nearest whole percent. Percentages may not add exactly due to rounding.) Statement of earnings: Sales revenue Cost of sales Gross margin Answer is complete and correct. Operating expenses and interest expense Earnings before income taxes Income tax expense Net earnings Statement of financial position: Cash Accounts receivable (net) Inventory Property, plant, and equipment (net) Total assets Current liabilities Long-term liabilities Common shares Retained earnings Total liabilities and shareholders' equity Component Percentages Year 2 100 85 15 10 5 2 3 5 17 49 29 100 16 39 26 19 100 % % % % % % % % % % % % % % % % %
Transcribed Image Text:Required: 1. Present component percentages for Year 2 only. (Input all amounts as positive values. Round the final answers to the nearest whole percent. Percentages may not add exactly due to rounding.) Statement of earnings: Sales revenue Cost of sales Gross margin Answer is complete and correct. Operating expenses and interest expense Earnings before income taxes Income tax expense Net earnings Statement of financial position: Cash Accounts receivable (net) Inventory Property, plant, and equipment (net) Total assets Current liabilities Long-term liabilities Common shares Retained earnings Total liabilities and shareholders' equity Component Percentages Year 2 100 85 15 10 5 2 3 5 17 49 29 100 16 39 26 19 100 % % % % % % % % % % % % % % % % %
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