EBK FINANCIAL & MANAGERIAL ACCOUNTING
13th Edition
ISBN: 9780100545052
Author: WARREN
Publisher: YUZU
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 1, Problem 1.1EX
Types of businesses
The following is a list of well-known companies:
- 1. Alcoa Inc.
- 2. Boeing
- 3. Caterpillar
- 4. Citigroup Inc.
- 5. CVS
- 6. Dow Chemical Company
- 7. eBay Inc.
- 8. FedEx
- 9. Ford Motor Company
- 10. Gap Inc.
- 11. H&R Block
- 12. Hilton Hospitality, Inc.
- 13. Procter 8c Gamble
- 14. SunTrust
- 15. Walmart Stores, Inc.
A. Indicate whether each of these companies is primarily a service, merchandise, or manufacturing business. If you are unfamiliar with the company, use the Internet to locate the company’s home page or use the finance Web site of Yahoo (finance.yahoo.com).
B. For which of the preceding companies is the
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Wendy’s International, Inc., and McDonald’s Corporation, two leading fast-food chains, are classified in SIC code 5812—Eating Places. Recent results for each company, along with industry averages, follow.
Wendy’s
McDonald’s
Industry Average
Return on assets
7.7
%
9.9
%
6.4
%
Return on common stockholders’equity
11.9
%
17.7
%
14.0
%
Net income as a percentage of sales
7.4
%
12.7
%
2.9
%
Debt-to-equity ratio
0.67
0.98
1.04
How do Wendy’s and McDonald’s compare to the industry averages? Based on your analysis, would you consider these two companies to be industry leaders? Why or why not?
The industry data reported here represent Dun and Bradstreet’s industry median. Dun and Bradstreet also reports industry norms for the upper quartile (top 25%) of companies in the industry. In the top quartile, return on assets was 15.1%, return on common stockholders’ equity was 34.7%,…
Compare Amazon.com to Best Buy
Amazon.com, Inc. (AMZN) is one of the largest Internet retailers in the world. We will use Amazon as a continuing company exercise to reinforce the various tools and
techniques for analyzing financial statements. We will begin with the ratio of liabilities to stockholders' equity.
Ratios can be used to compare companies in the same industry. For Amazon, there are a number of competitors that sell media, electronic, and other merchandise. Best
Buy, Inc. (BBY) is one such company. The following total liabilities and stockholders' equity information (in millions) is provided for Amazon and Best Buy for the end of
a recent year:
Total assets
Total liabilities
Total stockholders' equity
a. Compute the ratio of liabilities to stockholders' equity for each company. Round to two decimal places.
Amazon
Best Buy
$420,549 $19,067
282,304
14,480
138,245
4,587
Liabilities to stockholders' equity ratio
Amazon
Best Buy
b. Which of the following indicates the level of…
If given the opportunity, in which of the firms would you invest based on the result of your analysis of both companies and the comparison with the industry? If you would not invest, explain your reasons according to the results obtained.
Company Name:
Year 2018
Chemicals and Allied Products Industry Ratios
…………..
Solvency or Debt Ratios
Merck
J&J
2018
Debt ratio
0.67
0.61
0.47
Debt-to-equity ratio
0.93
0.51
0.38
Interest coverage ratio
12.27
18.91
-9.43
Liquidity Ratios
Current ratio
1.17
1.47
3.47
Quick ratio
0.92
1.16
2.12
Cash ratio
0.40
0.63
2.24
Profitability Ratios
Profit margin
14.64%
18.75%
-93.4%
ROE (Return on equity), after tax
23.03%
25.60%
-248.5
ROA (Return on assets)
7.49%
10.00%
-146.5
Gross margin
68.06%
66.79%
55.3%
Operating margin (Return on sales)
19.62%
24.27%…
Chapter 1 Solutions
EBK FINANCIAL & MANAGERIAL ACCOUNTING
Ch. 1 - Name some users of accounting information.Ch. 1 - Prob. 2DQCh. 1 - Prob. 3DQCh. 1 - Prob. 4DQCh. 1 - On July 12, Reliable Repair Service extended an...Ch. 1 - Prob. 6DQCh. 1 - Describe the difference between an account...Ch. 1 - A business had revenues of 679,000 and operating...Ch. 1 - Prob. 9DQCh. 1 - The financial statements are interrelated. What...
Ch. 1 - Prob. 1.1APECh. 1 - Prob. 1.1BPECh. 1 - Accounting equation Dream-It LLC is a motivational...Ch. 1 - Prob. 1.2BPECh. 1 - Transactions Arrowhead Delivery Service is owned...Ch. 1 - Transactions Interstate Delivery Service is owned...Ch. 1 - Prob. 1.4APECh. 1 - Prob. 1.4BPECh. 1 - Prob. 1.5APECh. 1 - Prob. 1.5BPECh. 1 - Balance sheet Using the following data for Ousel...Ch. 1 - Prob. 1.6BPECh. 1 - Prob. 1.7APECh. 1 - Prob. 1.7BPECh. 1 - Prob. 1.8APECh. 1 - Prob. 1.8BPECh. 1 - Types of businesses The following is a list of...Ch. 1 - Prob. 1.2EXCh. 1 - Prob. 1.3EXCh. 1 - Prob. 1.4EXCh. 1 - Prob. 1.5EXCh. 1 - Prob. 1.6EXCh. 1 - Prob. 1.7EXCh. 1 - Asset, liability, and stockholders equity items...Ch. 1 - Effect of transactions on accounting equation What...Ch. 1 - Effect of transactions on accounting equation A. A...Ch. 1 - Effect of transactions on stockholders equity...Ch. 1 - Transactions The following selected transactions...Ch. 1 - Nature of transactions Teri West operates her own...Ch. 1 - Net income and dividends The income statement for...Ch. 1 - Prob. 1.15EXCh. 1 - Balance sheet items From the following list of...Ch. 1 - Income statement items From the following list of...Ch. 1 - Prob. 1.18EXCh. 1 - Income statement Dairy Services was organized on...Ch. 1 - Missing amounts from balance sheet and income...Ch. 1 - Prob. 1.21EXCh. 1 - Financial statements Each of the following items...Ch. 1 - Statement of cash flows Indicate whether each of...Ch. 1 - Prob. 1.24EXCh. 1 - Prob. 1.25EXCh. 1 - Ratio of liabilities to stockholders' equity The...Ch. 1 - Prob. 1.27EXCh. 1 - Transactions On April 1 of the current year,...Ch. 1 - Financial statements The amounts of the assets and...Ch. 1 - Financial statements Seth Feye established...Ch. 1 - Prob. 1.4APRCh. 1 - Transactions; financial statements DLite Dry...Ch. 1 - Prob. 1.6APRCh. 1 - Transactions Amy Austin established an insurance...Ch. 1 - Prob. 1.2BPRCh. 1 - Financial statements Jose Loder established Bronco...Ch. 1 - Prob. 1.4BPRCh. 1 - Prob. 1.5BPRCh. 1 - Missing amounts from financial statements The...Ch. 1 - Peyton Smith enjoys listening to all types of...Ch. 1 - Prob. 1.1CPCh. 1 - Prob. 1.2CPCh. 1 - Prob. 1.3CPCh. 1 - Prob. 1.6CP
Additional Business Textbook Solutions
Find more solutions based on key concepts
Bank loan; accrued interest LO132 On October 1, Eder Fabrication borrowed 60 million and issued a nine-month, ...
INTERMEDIATE ACCOUNTING
Adjusting Journal Entries; Adjusted Trial Balance. Magic Cleaning Services (MCS) has a fiscal year-end of Decem...
Intermediate Accounting (2nd Edition)
(a) Standard costs are the expected total cost of completing a job. Is this correct? Explain, (b) A standard im...
Managerial Accounting: Tools for Business Decision Making
18. What is the calculation for return on assets (ROA)? Explain what ROA measures.
Horngren's Financial & Managerial Accounting, The Financial Chapters (6th Edition)
Analysis of inventory errors A2 Hallam Company’s financial statements show the following. The company recently ...
FINANCIAL ACCT.FUND.(LOOSELEAF)
Place the letter of the appropriate accounting cost in Column 2 in the blank next to each decision category in ...
Fundamentals Of Cost Accounting (6th Edition)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Effect of Industry Economics on Balance Sheets. Access the investor relations or corporate information section of the websites of American Airlines (www.aa.com), Intel (www.intel.com), and Disney (http://disney.com). Study the business strategies of each firm. Examine the financial ratios below and indicate which firm is likely to be American Airlines, Intel, and Disney. Explain your reasoning.arrow_forwardAnswer the questions based on P/E ratios per company given. Industry: Apparel Industry average P/E: AMC Entertainment Holdings, Inc. (NYSE:AMC) P/E: -4.1 Big Screen Entertainment Group, Inc. (OTCPK:BSEG) P/E: 19.92 Valiant Eagle Inc. (OTCPK:PSRU) OTCPK:PSRU P/E: 0.02 Cinemark Holdings, Inc. (NYSE:CNK) P/E: 21.41 Electronic Arts Inc. (NasdaqGS:EA) P/E: 57.12 The Movie Studio, Inc. (OTCPK:MVES) P/E: N/A at a loss The Walt Disney Company (NYSE:DIS) P/E: 88.15 Live Nation Entertainment, Inc. (NYSE:LYV) P/E: -14.42 Lions Gate Entertainment Corp. (NYSE:LGF.A) P/E: 37.34 Madison Square Garden Entertainment Corp. (NYSE:MSGE) P/E: -4.928 Which firms are investors most excited about, and which firms are investors least excited about? Are there any significant outliers present? Note the highest and lowest P/E ratios. Do these numbers surprise you? Do the P/E ratios make sense; do you see any that seem out of linearrow_forwardAGF Foods Company is a large, primarily domestic, consumer foods company involved in the manufacture, distribution, and sale of a variety of food products. Industry averages are derived from Troy's The Almanac of Business and Industrial Financial Ratios and Dun and Bradstreet's Industry Norms and Key Business Ratios. Following are the 2024 and 2023 comparative income statements and balance sheets for AGF. The market price of AGF's common stock is $47 at the end of 2024. (The financial data we use are from actual financial statements of a well-known corporation, but the company name used in our illustration is fictitious and the numbers and dates have been modified slightly to disguise the company's identity.) Profitability is the key to a company's long-run survival. Profitability measures focus on a company's ability to provide an adequate return relative to resources devoted to company operations. AGF FOODS COMPANY Years Ended December 31, 2024 and 2023 2024 Comparative Income…arrow_forward
- AGF Foods Company is a large, primarily domestic, consumer foods company Involved in the manufacture, distribution, and sale of a variety of food products. Industry averages are derived from Troy's The Almanac of Business and Industrial Financial Ratios and Dun and Bradstreet's Industry Norms and Key Business Ratios. Following are the 2024 and 2023 comparative Income statements and balance sheets for AGF. The market price of AGF's common stock is $47 at the end of 2024. (The financial data we use are from actual financial statements of a well-known corporation, but the company name used in our illustration is fictitious and the numbers and dates have been modified slightly to disguise the company's Identity:) Profitability is the key to a company's long-run survival. Profitability measures focus on a company's ability to provide an adequate return relative to resources devoted to company operations. ($ in millions) AGF FOODS COMPANY Years Ended December 31, 2024 and 2023 2024…arrow_forwardEvaluating Financials and Ratios From Chapter 17 1. From the data given in the following table, please construct as many of the financial ratios discussed in this chapter as you can and then indicate what dimension of a business firm's performance each ratio represents. Cash account Accounts receivable Inventories Fixed assets Miscellaneous assets Cost of goods sold Wages and salaries Interest expense Overhead expenses Depreciation expenses Selling, administrative, and other expenses 108 Before-tax net income 117* Taxes owed 325* After-tax net income 15 160 725 *Annual principal payments on bonds and notes payable total $55. The firm's marginal tax rate is 35 percent. Short-term debt: Accounts payable Notes payable Long-term debt (bonds) Equity capital A. Business Assets B. C. D. The financial ratios that could be computed given the data in this problem fall under the following categories: E. F. Liabilities and Equity G. Annual Revenue and Expense Items $60 Net sales 155 128 286 96 725…arrow_forwardEffect of Business Strategy on Common-Size Income Statements. Access the investor relations or corporate information section of the websites of Apple Computer (www.apple.com) and Dell (www.dell.com). Study the strategies of each firm. Examine the following common-size income statements and indicate which firm is likely to be Apple Computer and which is likely to be Dell. Explain your reasoning. Indicate any percentages that seem inconsistent with their strategies.arrow_forward
- Identification of Commodity Businesses. A recent article in Fortune magazine listed the following firms among the top ten most admired companies in the United States: Dell, Southwest Airlines, Microsoft, and Johnson Johnson. Access the websites of these four companies or read the Business section of their Form 10-K reports (www.sec.gov). Describe whether you would view their products or services as commodities. Explain your reasoning.arrow_forwardInterpreting Ratios. In each of the following cases, explain briefly which of the two companies is likely to be characterized by the higher ratio. (O LO3) a. Debt-to-equity ratio: a shipping company or a computer software company b. Payout ratio: Food Producer Inc. or Computer Graphics Inc. c. Ratio of sales to assets: an integrated pulp and paper mill and manufacturer or a paper mill d. Average collection period: Regional Electric Power Company or. Z-Mart Discount Outletsarrow_forwardStryker Corporation is a leading medical technology company headquartered in Kalamazoo, Michigan, that trades on the New York Stock Exchange. Following are selected financial data for Stryker for the period 2009 to 2013. Profit margin (%) Retention ratio (%) Asset turnover (X) Financial leverage (X) Growth rate in sales (%) 2009 Source: Data from Stryker 2009 to 2013 annual reports. Year 2009 2010 2011 2012 2013 17.3 83.1 0.70 1.70 1.1 Sustainable Growth Rate % % % % % 2010 18.3 82.0 0.70 1.70 9.3 2011 Calculate Stryker's annual sustainable growth rate from 2009 through 2013. Note: Round your answers to 1 decimal place. 17.3 80.3 0.70 1.70 14.0 2012 16.1 76.1 0.70 1.70 4.8 2013 12.3 61.3 0.60 1.80 5.3arrow_forward
- According to the following ratio of Toyota critically assess the business financial condition of Toyotaarrow_forwardSpecialty Department Stores chief executive officer (CEO) has asked you to compare the company's profit performance and financial position with the average for the industry. The CEO has given you the company's income statement and balance sheet, as well as the industry average data for retailers. Assets \table[[Current assets, %,.71.1%arrow_forwardWhich of the following is an example of corporation? a. Nihal's car wash business b. Nizwa Ceramics center c. Ahmed's Car Wash business d. Oreedoarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Financial And Managerial AccountingAccountingISBN:9781337902663Author:WARREN, Carl S.Publisher:Cengage Learning,
Financial Reporting, Financial Statement Analysis...FinanceISBN:9781285190907Author:James M. Wahlen, Stephen P. Baginski, Mark BradshawPublisher:Cengage Learning
Financial And Managerial Accounting
Accounting
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:Cengage Learning,
Financial Reporting, Financial Statement Analysis...
Finance
ISBN:9781285190907
Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:Cengage Learning
Topic 6 - Financial statement analysis; Author: drdavebond;https://www.youtube.com/watch?v=uUnP5qkbQ20;License: Standard Youtube License