b.Trade association statistics and information provided by credit agencies reveal the followingdata on industry norms:MedianUpper QuartileProfit margin.Return on assetsReturn on commnon stockholders' equity.Quick ratio4.9 percent6.5 percent10.6 percent8.6 percent11.2 percent17.3 percent1.01.8Current ratioDebt-to-equity ratio1.83.01.080.66 Ratios Compared with Industry Averages Because you own the common stock of PhantomCorporation, a paper manufacturer, you decide to analyze the firm's performance for the mostrecent year. The following data are taken from the firm's latest annual report:P12-8A.LO4Dec. 31, 2020Dec. 31, 2019Quick assets.$$700,000372,0004,788,000552,000312,000Inventory and prepaid expensesOther assets.4,200,00O$5,064,00OTotal Assets$5,860,000Current liabilities.10% Bonds payable8% Preferred stock, $1 00 par valueCommon stock, $10 par valueRetained earnings$4724,0001,440,00o480,0002,700,00O516,000$5,860,000564,0001,440,000480,0002,160,00O420,000Total Liabilities and Stockholders' Equity$5,064,00oFor 2020, net sales amount to $11,280,000, net income is $575,000, and preferred stock dividendspaid are $42,000.RequiredCalculate the following ratios for 2020:1.a.Profit margin2.Return on assets3.Return on common stockholders’ equityQuick ratioCurrent ratio4.5.6.Debt-to-equity ratio

Ratio analysis: It helps to gain insight into company profitability, liquidity, operational…

Ratios Industry Averages Because you own the comm on stock of Phantom Corporation, a paper manufacturer, you decide to analyze the firm's performance for the most recent year. The following data are taken from the firm's latest annual report: Compared with LO Dec. 31, 2020 Dec. 31, 2019 $ 552,000 Quick assets. Inventory and prepaid expenses Other assets . 24 700,000 372,000 312,000 4,788,000 4,200,000 Total Assets $5,860,000 $5,064,000 Current liabilities. 724,000 $ 564,000 $4 1,440,000 480,000 2,700,000 $ 10% Bonds payable 8% Preferred stock, $100 par value Common stock, $10 par value Retained earnings..... 1,440,000 480.000 2,160,000 420,00O 516,000 Total Liabilities and Stockholders' Equity $5,860,000 $5,064,000 For 2020, net sales amount to $11,280,000, net income is $575,000, and preferred stock dividends paid are $42,000. Required Calculate the following ratios for 2020: a. Profit margin Return on assets Return on common stockholders’ equity Quick ratio Current ratio 1. 2. 3. 4. 5. 6. Debt-to-equity ratio

Ratios Industry Averages Because you own the comm on stock of Phantom Corporation, a paper manufacturer, you decide to analyze the firm's performance for the most recent year. The following data are taken from the firm's latest annual report: Compared with LO Dec. 31, 2020 Dec. 31, 2019 $ 552,000 Quick assets. Inventory and prepaid expenses Other assets . 24 700,000 372,000 312,000 4,788,000 4,200,000 Total Assets $5,860,000 $5,064,000 Current liabilities. 724,000 $ 564,000 $4 1,440,000 480,000 2,700,000 $ 10% Bonds payable 8% Preferred stock, $100 par value Common stock, $10 par value Retained earnings..... 1,440,000 480.000 2,160,000 420,00O 516,000 Total Liabilities and Stockholders' Equity $5,860,000 $5,064,000 For 2020, net sales amount to $11,280,000, net income is $575,000, and preferred stock dividends paid are $42,000. Required Calculate the following ratios for 2020: a. Profit margin Return on assets Return on common stockholders’ equity Quick ratio Current ratio 1. 2. 3. 4. 5. 6. Debt-to-equity ratio

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter16: Financial Statement Analysis

Section: Chapter Questions

Problem 4PB

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