Complete a margin analysis for Associated Industries and answer the questions below. Associated Industries Year Ending Year Ending Change 2016 2017 Gross Margin 43.7% 43.7% 0% Operating Margin 3.9% 3.0% (.9%) Net Margin 3.0% 2.4% (.6%) 1. What was the change to the Operating Margin and what does that indicate for the operation of the business?
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- Problem 1: Viance Queen Company Required: Compute for the company’s profitability and operating efficiency ratios for 2019 Compute for the financial health ratios of the company for 2019 A.Profitability ratio a.Gross Profit Ratio b. Operating income margin c. Net profit margin d. Return on Assets: ROA (NI/Total Assets) ROA (NI/Average Assets) ROA (EBIT/Total Assets) ROA (EBIT/Average Assets) ROE (NI/Capital) ROE (NI/Average Capital B.Operating Efficiency a. Asset Turnover b. Fixed Asset Turnover c. Inventory Turnover d. Days in Inventory e. AR Turnover f. Days in AR C.Financial Health/ (Solvency and Liquidity) Solvency ratio: a. Debt to equity ratio b. Debt Ratio c. Equity Ratio d. Interest Coverage Ratio Liquidity ratio: a. Current Ratio b. Quick RatioThe 2024 income statement of Adrian Express reports sales of $20,310,000, cost of goods sold of $12,500,000, and net income of $1,900,000. Balance sheet information is provided in the following table. Assets Current assets: Cash Accounts receivable Inventory ADRIAN EXPRESS Balance Sheets December 31, 2024 and 2023 Long-term assets Total assets Liabilities and Stockholders' Equity Current liabilities Long-term Liabilities Common stock Retained earnings Total liabilities and stockholders' equity Industry averages for the following four risk ratios are as follows: Gross profit ratio Return on assets Profit margin Asset turnover Return on equity 45% 25% 15% 6.5 35% tines 2024 2023 $800,000 $910,000 1,725,000 1,175,000 2,175,000 1,625,000 5,000,000 4,390,000 $9,700,000 $8,100,000 $2,030,000 $1,820,000 2,490,000 2,560,000 2,025,000 1,975,000 3,155,000 1,745,000 $9,700,000 $8,100,000Case Study Questions What was the total postpaid revenue in 2017? What was the total net profit in 2017? Identify examples of strategies adopted by MAXIS in that year. How were the above strategies related to their Customer Relationship Management (CRM) and future sale?
- Required: (a) You are required to calculate the following ratios:(i) Gross profit margin(ii) Operating profit margin(iii) Expenses to sales(iv) Return on Capital Employed(v) Asset turnover(vi) Non-current asset turnover(vii) Current Ratio(viii) Quick Ratio(ix) Inventory days(x) Receivables days(xi) Payable days(xii) Interest cover (b) In light of your calculations comment on the performance of the company over thelast two years.What is the comparison (analysis) of the Days Sales Outstanding of Industry Average Ratio and the Company A Ratio? The Days Sales Outstanding has decreased and increased. Why? Industry Average DSO 2015: 138 days 2016: 104 days 2017: 173 days 2018: 125 days 2019: 98 days Company A DSO 2015: 245 days 2016: 338 days 2017: 332 days 2018: 169 days 2019: 81 daysCase 1: Vertical Analysis of Profit and LossPrepare a vertical analysis of the income statements of GMA from 2007 to 2010 by usingRevenues as the base.1. Describe the trend of revenues from 2007 to 2010. What observations can be drawn?2. Describe the trend of direct costs from 2007 to 2010. What observations can be drawn?3. Describe the trend of operating expenses from 2007 to 2010. What observations can be drawn?4. Describe the trend of operating income from 2007 to 2010. What observations can be drawn?5. Describe the trend of net income from 2007 to 2010. What observations can be drawn?
- Problem 1: Viance Queen Company Required: Compute for the company’s profitability and operating efficiency ratios for 2019 Compute for the financial health ratios of the company for 2019 A.Profitability ratio Return on Assets: ROA (EBIT/Average Assets) ROE (NI/Capital) ROE (NI/Average CapitalWhat is the comparison (analysis) of the Operating Margin of Industry Average Ratio and the Company A Ratio? The Operating Margin ratios has decreased and increased. Why? Industry Average Operating Margin 2015: 30.10% 2016: 37.75% 2017: 21.39% 2018: 18.92% 2019: 25.38% Company A Operating Margin 2015: 23.33% 2016: 15.69% 2017: 18.15% 2018: 25.06% 2019: 16.82%Question 2Alex is currently considering to invest his money in one of the companies between Company A and Company B. The summarized final accounts of the companies for their last completed financial year are as follows: a. Calculate the following ratios for Company A and Company B. State clearly the formulae used for each ratio: i. Gross Profit Marginii. Net Profit Marginiii. Inventory Turnover Period (days)iv. Receivables Collection Period (days)
- Requirements: a. Prepare horizontal analysis based on the above statements presented (for percent: round of your answers to 2 decimal places) Music Lover, Inc.xlsx b. Evaluate the company's financial position and results of operation using the comparative statement analysis i. Short-term solvency analysis ii. Long-term financial position analysis iii. Operating efficiency and profitability analysisProblem 1: Viance Queen Company Required: Compute for the company’s profitability and operating efficiency ratios for 2019 Compute for the financial health ratios of the company for 2019 A.Profitability ratio a. Return on Assets: ROA (NI/Total Assets) ROA (NI/Average Assets) ROA (EBIT/Total Assets) ROA (EBIT/Average Assets) ROE (NI/Capital) ROE (NI/Average CapitalVII. Direction: Compute and interpret. The following comparative financial statements are provided by Avatar Industries. You were asked to compute the different financial ratios and provide your interpretations with regards to profitability, efficiency, liquidity and solvency of the company. Use the Answer Sheet template below to input your answer and solution. AVATAR INDUSTRIES AVATAR INDUSTRIES Comparative Statement of Financial Position For the years 2019 and 2018 Comparative Income Statement For the years 2019 and 2018 2019 2018 2019 2018 ASSETS Current Assets: Sales P200,000 P210,000 Cash & Cash Equivalent P65,000 P70,000 Sales Returns and Allowances 40,000 25,000 Accounts Receivable 40,000 35,000 Net Sales 160,000 185,000 Marketable Secuities 40,000 35,000 Cost of Goods Sold 100,000 115,625 Inventory 100,000 80,000 Gross Profit 60,000 69,375 Total Current Assets 220,000 200,000 160,000 P445,000 P380,000 245,000 Operating Expenses: Fixed Assets Selling Expenses 22,000 25,000 Total…