
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Transcribed Image Text:Presented below are condensed financial statements adapted from those of two actual
companies competing in the pharmaceutical industry-Benatar and Jett, Incorporated ($ in
millions, except per share amounts).
Balance Sheets
($ in millions, except per share data)
1. For both companies, compute the ratios below. (Consider 365 days a year. Do not round intermediate
calculations. Round "Asset Turnover" answers to 3 decimal places and other final answers to 2 decimal
places.)
Assets:
Cash
Short-term investments
Accounts receivable (net)
Inventory
Other current assets
Current assets
Property, plant, and equipment (net)
Intangibles and other assets
Total assets
Liabilities and Shareholders' Equity:
Accounts payable
Short-term notes
Other current liabilities
Current liabilities
Long-term debt
Other long-term liabilities
Total liabilities
Benatar
Jett
Benatar
Jett
$ 17,380
$ 1,485
Receivables Turnover
times
2,027
8,540
times
15,081
8,739
9,620
8,313
Average Collection Period
days
days
2,546
6,566
46,654
33,643
Inventory Turnover
times
times
17,688
14,012
95,396
120,809
$ 159,738
$ 168,464
Average Days in Inventory
Profit Margin
days
days
%
%
$ 8,634
1,247
26,248
$ 4,295
16,270
16,979
Asset Turnover
times
times
Return on Assets
36,129
37,544
%
%
26,584
36,030
35,889
32,283
Equity Multiplier
98,602
105,857
Return on Equity
%
%
3,795
87,956
97,745
11,715
Common stock (par and additional paid-in capital)
Retained earnings
Accumulated other comprehensive income (loss)
Less: Treasury stock and other equity adjustments
Total shareholders' equity
112,294
(16,491)
(38,462).
61,136
(111,379)
62,607
$ 168,464
Show Image Transcript
Total liabilities and shareholders' equity
$ 159,738
Income Statements
Gross profit
Operating expenses
Net sales
Cost of goods sold
Other (income) expense-net
Income before taxes
$ 84,009
53,700
27,616
10,369
56,393
43,331
34,725
20,331
Here's the best solution from Chegg's library.
(2,600)
3,728
19,068
19,272
Income tax expense
2,299
1,414
Net income
Basic net income per share
$ 16,769
$ 17,858*
$ 5.87
$ 3.07
Any follow-up questions
*This is before income from discontinued operations.
Evaluate and compare the two companies by responding to the following questions.
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