Please answer the question below according to the information given in the attachment:a) Using the information provided for 31 Dec 2005, calculate the following: net working capital, current ratio, quick ratio, inventory turnover, average collection period, total debt ratio, gross profit margin, net profit margin, return on total assets, return on equity.b) Evaluate the company’s performance against industry average ratios and compare with last year’s results. Alpha Milk Corp is considering taking over their competitor, Dana DairyProducts, and asked your consultancy firm to perform financial statementanalysis to assess feasibility of this strategic initiative. You are given thefollowing key financial ratios, the firm's income statement and the balancesheet. You can assume that there are 365 days in a year.Dana Dairy Products Key RatiosIndustryAverage1.3ActualActual20042005Current Ratio1.0Quick Ratio0.80.7530 daysAverage collection Period 23 daysInventory TurnoverDebt Ratio21.71964.7%50%Times Interest Earned4.85.5Gross Profit MarginNet Profit Margin13.6%12.0%1.0%0.5%Return on total assets2.9%2.0%Return on Equity8.2%4.0%Income StatementDana Dairy ProductsFor the Year Ended December 31, 2005$100,00087,000$13,00011,000$2,000Sales RevenueLess: Cost of Goods SoldGross ProfitsLess: Operating ExpensesOperating ProfitsLess: Interest ExpenseNet Profits Before Taxes500$1,500600$900Less: Taxes (40%)Net Profits After Taxes Balance SheetDana Dairy ProductsDecember 31, 2005AssetsCash$ 1,000Accounts Receivable8,900Inventories4,350$14,250Total Current AssetsGross Fixed Assets$35,000Less: Accumulated DepreciationNet Fixed Assets13,25021,750$36,000Total AssetsLiabilities & Stockholders' EquityAccounts PayableAccruals$ 9,0006,675$15,6754,125$19,8001,00015,200$16,200$36,000Total Current LiabilitiesLong-term DebtTotal LiabilitiesCommon StockRetained EarningsTotal Stockholders' EquityTotal Liabilities & Stockholders Equity

Please answer the question below according to the information given in the attachment: a) Using the information provided for 31 Dec 2005, calculate the following: net working capital, current ratio, quick ratio, inventory turnover, average collection period, total debt ratio, gross profit margin, net profit margin, return on total assets, return on equity. b) Evaluate the company’s performance against industry average ratios and compare with last year’s results.

Please answer the question below according to the information given in the attachment: a) Using the information provided for 31 Dec 2005, calculate the following: net working capital, current ratio, quick ratio, inventory turnover, average collection period, total debt ratio, gross profit margin, net profit margin, return on total assets, return on equity. b) Evaluate the company’s performance against industry average ratios and compare with last year’s results.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter9: Responsibility Accounting And Decentralization

Section: Chapter Questions

Problem 5PA: Financial information for BDS Enterprises for the year-ended December 31, 20xx, was gathered from an...

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Financial information for BDS Enterprises for the year-ended December 31, 20xx, was gathered from an accounting intern, who has asked for your guidance on how to prepare an income statement format that will be distributed to management. Subtotals and totals are included in the information, but you will need to calculate the values. A. In the correct format, prepare the income statement using the following information: B. Calculate the profit margin, return on investment, and residual income. Assume an investment base of $100,000 and 6% cost of capital. C. Prepare a short response to accompany the income statement that explains why uncontrollable costs are included in the income statement.
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