Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN: 9781337395083
Author: Eugene F. Brigham, Phillip R. Daves
Publisher: Cengage Learning
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Chapter 7, Problem 14P
Summary Introduction
To determine: The company J’s
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Use information from the balance sheet and income statement to calculate the following financial ratios and the market value added (MVA).
(Whenever balance sheet numbers are used to calculate financial ratios, please ensure that you use the average of the 2019 and 2020 numbers in your calculation. To calculate MVA, you can assume that the average book value number for common stock and paid-in-surplus is the amount that the shareholders initially invested in the company.)
The image uploaded is the calculation of Access Bank's Profitability ratios, shorter liquidity ratios, long-term liquidity ratios, and investment ratios for 2020, 2021, 2022. A base year of 2019 was also added. Evaluate the financial performance by comparing the three (3) years' financial performance that is 2020, 2021, and 2022 I have provided in the table with the base year.
The Jimenez Corporation’s forecasted 2020 financial statements follow, along with some industry average ratios. Calculate Jimenez’s 2020 forecasted ratios, compare them with the industry average data, and comment briefly on Jimenez’s projected strengths and weaknesses.Jimenez Corporation:
Forecasted Balance Sheet as of December 31, 2020
Assets
Cash
72,000
Accounts receivable
439,000
Inventories
894,000
Total current assets
1,405,000
Fixed assets
431,000
Total assets
1,836,000
Liabilities and Equity
Accounts payable
332000
Notes payable
100,000
Accruals
170,000
Total current liabilities
602,000
Long-term debt
404,290
Common stock
575,000
Retained earnings
254,710
Total liabilities and equity
1,836,000
Jimenez Corporation: Forecasted Income Statement for 2020
Sales
4,290,000
Cost of goods sold
3,580,000
Selling, general, and admin expenses
525,456
Earnings before taxes (EBT)
184,544
Interest expense
40,000
Earnings…
Chapter 7 Solutions
Intermediate Financial Management (MindTap Course List)
Ch. 7 - Define each of the following terms:
Liquidity...Ch. 7 - Financial ratio analysis is conducted by managers,...Ch. 7 - Prob. 3QCh. 7 - Profit margins and turnover ratios vary from one...Ch. 7 - How might (a) seasonal factors and (b) different...Ch. 7 - Why is it sometimes misleading to compare a...Ch. 7 - Greene Sisters has a DSO of 20 days. The companys...Ch. 7 - Vigo Vacations has $200 million in total assets,...Ch. 7 - Winston Watch’s stock price is $75 per share....Ch. 7 - Reno Revolvere has an EPS of $1.50, a cash flow...
Ch. 7 - Needham Pharmaceuticals has a profit margin of 3%...Ch. 7 - Prob. 6PCh. 7 - Ace Industries has current assets equal to 3...Ch. 7 - The Morrit Corporation has $600,000 of debt...Ch. 7 - The Kretovich Company had a quick ratio of 1.4, a...Ch. 7 - Data for Lozano Chip Company and its industry...Ch. 7 - Prob. 14PCh. 7 - Why are ratios useful? What three groups use ratio...Ch. 7 - Prob. 2MCCh. 7 - Calculate the 2019 inventory turnover, days sales...Ch. 7 - Calculate the 2019 debt ratio,...Ch. 7 - Prob. 5MCCh. 7 - Prob. 8MCCh. 7 - Prob. 9MCCh. 7 - What are some qualitative factors that analysts...
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- As part of your analysis, you are required to investigate Micron Industries’ cash flows and selected ratios.Required: Using the financial statement provided on page 1: (a) Compute the following ratios for Micron Industries for 2018 and 2019:i. Return on Equity using Du Pont Identity ii. Earnings Per Share (EPS) iii. Price/Earning (P/E) Ratio iv. Book Value Per Share v. Market-to-Book Ratio (b) Calculate the following for 2019:i. Operating Cash Flowii. Net Capital Spending iii. Change in Net Working Capital iv. Cash Flow from Assets v. Cash Flow to Creditors vi. Cash Flow to Stockholdersarrow_forwardThe Jimenez Corporation’s forecasted 2020 financial statements follow, along with some industry average ratios. Calculate Jimenez’s 2020 forecasted ratios, compare them with the industry average data, and comment briefly on Jimenez’s projected strengths and weaknesses. Jimenez Corporation: Forecasted Balance Sheet as of December 31, 2020 Jimenez Corporation: Forecasted Income Statement for 2020 Jimenez Corporation: Per Share Data for 2020 Notes: aIndustry average ratios have been stable for the past 4 years. bBased on year-end balance sheet figures. cCalculation is based on a 365-day year.arrow_forwardPerform the common sizing analysis for 2019 and 2018. Comment on your observations on the changes in the percentages. Focus on a) the change in the amount of total assets --- does this mean the firm is doing better? Why or why not? b) the changes in current assets, current liabilities and what this could mean for the firm. c) the changes in debt: what has increased more, total current liabilities or long-term debt? d) the change in total common equity. What has driven the change? e) the conundrum that although sales have nearly doubled, the firm makes a loss in 2019. What has caused this situation?arrow_forward
- Calculate the financial ratios of D&G Co. for 2019 and interpret the financial position of the firm. you already answer first three sub ı need rest of them.arrow_forwardToby’s forecasted 2021 financial statements follow, along with some industry average ratios. Calculate Toby’s 2021 forecasted ratios and fill in the above table. Calculate the EPS and DPS. The company has a 40% payout ratio. Please provide the solutions for the EPS, DPS, Days Sales Outstanding, Fixed Asset Turnover, Total Asset Turnover, Return on Assets, Return on Equity, Total Debt Ratio, Profit Margin on Sales, P/E Ratio.arrow_forwardThe image uploaded is the calculation of Socite Generale Bank, Ghana, Profitability ratios, shorter liquidity ratios, long-term liquidity ratios, and investment ratios for 2020, 2021, 2022. A base year of 2019 was also added. Evaluate the financial performance by comparing the three (3) years' financial performance that is 2020, 2021, and 2022 I have provided in the table with the base year.arrow_forward
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