Balance SheetsMetropolitanRepublicAssetsCashAccounts receivable (net)Short-term investmentsInventoryPrepaid expenses and other current assetsCurrent assets263.342.4495.7394.07.8703.2558.7542.4196.6Property, plant, and equipment (net)Intangibles and other assets$ 1,498.02,686.2283.3$ 1,706.22,529.3569.3$ 4,467.5$ 4,804.7Total assetsLiabilities and Shareholders' EquityAccounts payable551.9294.1661.2765.2623.4Short-term notes608.5Accruals and other current liabilities$ 1,997.1$ 1,507.2623.6Current liabilities623.3Long-term debtDeferred tax liabilityOther long-term liabilities452.6684.7193.0178.1Total liabilities$ 2,776.4$3,483.2418.0Common stock (par and additional paid-in capital)Retained earningsLess: Treasury stock212.92,546.9(1,068.7)$ 4,467.51,680.9(777.4)$ 4,804.7Total liabilities and shareholders' equityIncome Statements$ 5,772.0(2,837.0)$ 2,935.0(1,662.7)(68.8)$ 1,203.5(311.7)891.8$ 7,839.2(4,408.7)$ 3,430.5(2,755.2)(43.6)Net salesCost of goods soldGross profitOperating expensesInterest expenseIncome before taxes631.7Income tax expense(200.1)Net income24431.6Net income per share$42.27.2Evaluate and compare the two companies by responding to the following questions.Note: Because comparative statements are not provided you should use year-end balances in place ofappropriate.Required:1. For both companies, compute the ratios below.2. Evaluate and compare the two companies.RepublicMetropolitan19.968.98 %Return on Assets15.45 %5.51 %Profit Margin1.29times1.63 timesAsset Turnover4.19 X %1.03 %Return on Equity20.9811.49Equity Multiplier0.50 M0.22Acid-Test Ratio1.78 X0.85Current Ratio11.64 times20.03 X timesReceivables Turnover5.23 times6.27 timesInventory Turnover13.96 X times10.90 X timesTimes Interest Earned

Return on Equity = Net IncomeShareholders' Equity Equity Multiplier = Total AssetsShareholders'…

19.96 % 8.98 O % Return on Assets 15.45 5.51 Profit Margin 1.29 times 1.63 times Asset Turnover 4.19 X % 1.03 X % Return on Equity 20.98 X 11.49 Equity Multiplier 0.50 0.22 Acid-Test Ratio 1.78 0.85 Current Ratio Receivables Turnover 11.64 times 20.03 X times 5.23 times 6.27 times Inventory Turnover Times Interest Earned 13.96 X times 10.90 X times

19.96 % 8.98 O % Return on Assets 15.45 5.51 Profit Margin 1.29 times 1.63 times Asset Turnover 4.19 X % 1.03 X % Return on Equity 20.98 X 11.49 Equity Multiplier 0.50 0.22 Acid-Test Ratio 1.78 0.85 Current Ratio Receivables Turnover 11.64 times 20.03 X times 5.23 times 6.27 times Inventory Turnover Times Interest Earned 13.96 X times 10.90 X times

Financial Reporting, Financial Statement Analysis and Valuation

8th Edition

ISBN:9781285190907

Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Chapter8: Investing Activities

Section: Chapter Questions

Problem 1.3AIC: Estimate the average total estimated useful life of depreciable property, plant, and equipment....

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