Connect Access Card for Financial Accounting: Information and Decisions
8th Edition
ISBN: 9781259662966
Author: John J Wild
Publisher: McGraw-Hill Education
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Chapter 1, Problem 14E
Summary Introduction
Concept introduction:
Return on assets (ROA):
To calculate and interpret: the return on asset for the company.
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Computing and Interpreting Financial Statement Ratios
Following are selected ratios of Norfolk Southern for 2018 and 2017.
Return on Assets (ROA) Component
2018
2017
Profitability (Net income/Sales)
24.3%
52.2%
Productivity (Sales/Average assets)
0.328
0.309
a. Was the company profitable in 2018?AnswerYesNo
b. Was the company more profitable in 2018 or 2017?Answer20172018
c. Is the change in productivity a positive or negative development?AnswerPositiveNegative
d. Compute the company’s ROA for 2018 and for 2017.Note: Round answers to one decimal places (example: 10.4%).
ROA
2018
Answer
2017
Answer
8. Trend Ratios, Application of some Financial Ratios and their Interpretation
Some of the balance sheet and income statement figures of Sapphire Mfg. CO. for 2016, 2017 and 20181 are as
follows.
2018
P30,000
2016
2017
Quick assets
P40,000
P48,000
65,000
25,000
80,000
50,000
Current assets
50,000
40,000
110,000
200,000
Investments
160,000
135,000
Plants, property and equipment, net
Total assets
250,000
265,000
Current liabilities
45,000
50,000
100,000
75,000
Long Term debt
Total stockholders' equity
40,000
50,000
105,000
125,000
125,000
Total liabilities and stockholders'
Equity
200,000
400,000
240,000
250,000
265,000
Sales
375,000
500,000
Cost of goods sold
Operating expenses (including
Depreciation of P10,000)
255,000
290,000
110,000
95,000
105,000
Net income
50,000
50,000
130,000
a) Compute for the trend ratios based on the above given data and give your interpretation of the 2017 and 2018
figures.
Chapter 1 Solutions
Connect Access Card for Financial Accounting: Information and Decisions
Ch. 1 - Prob. 1DQCh. 1 - Technology is increasingly used to process...Ch. 1 - Identify four kinds of external users and describe...Ch. 1 - What are at least three questions business owners...Ch. 1 - Prob. 5DQCh. 1 - Describe the internal role of accounting for...Ch. 1 - Identify three types of services typically offered...Ch. 1 - Prob. 8DQCh. 1 - Why is accounting described as a service activity?Ch. 1 - What are some accounting-related professions?
Ch. 1 - Prob. 11DQCh. 1 - Prob. 12DQCh. 1 - What does the concept of objectivity imply for...Ch. 1 - Prob. 14DQCh. 1 - Prob. 15DQCh. 1 - Prob. 16DQCh. 1 - Define (a) assets, (b) liabilities, (c) equity,...Ch. 1 - Prob. 18DQCh. 1 - Prob. 19DQCh. 1 - What do accountants mean by the term revenue?Ch. 1 - Prob. 21DQCh. 1 - Prob. 22DQCh. 1 - Prob. 23DQCh. 1 - Prob. 24DQCh. 1 - Prob. 25DQCh. 1 - Prob. 26DQCh. 1 - Prob. 27DQCh. 1 - Define and explain return on assets.Ch. 1 - Define return and risk. Discuss the trade-off...Ch. 1 - Prob. 30DQCh. 1 - Prob. 31DQCh. 1 - Prob. 32DQCh. 1 - Prob. 33DQCh. 1 - Prob. 34DQCh. 1 - Choose from the following term or phrase a through...Ch. 1 - Prob. 2QSCh. 1 - Prob. 4QSCh. 1 - Prob. 5QSCh. 1 - Prob. 6QSCh. 1 - Prob. 7QSCh. 1 - Applying the accounting equation A1 Use the...Ch. 1 - Prob. 9QSCh. 1 - Prob. 10QSCh. 1 - Prob. 11QSCh. 1 - Prob. 12QSCh. 1 - Prob. 13QSCh. 1 - Prob. 14QSCh. 1 - Prob. 15QSCh. 1 - Prob. 16QSCh. 1 - Prob. 1ECh. 1 - Identifying accounting users and uses C2 Part A....Ch. 1 - Prob. 3ECh. 1 - Prob. 6ECh. 1 - Prob. 7ECh. 1 - Determine the missing amount from each of the...Ch. 1 - Prob. 9ECh. 1 - Prob. 10ECh. 1 - Prob. 11ECh. 1 - Prob. 12ECh. 1 - Prob. 13ECh. 1 - Prob. 14ECh. 1 - Prob. 15ECh. 1 - Use the information in Exercise 1-15 to prepare an...Ch. 1 - Prob. 17ECh. 1 - Prob. 18ECh. 1 - Prob. 19ECh. 1 - Prob. 20ECh. 1 - Prob. 21ECh. 1 - Prob. 1PSACh. 1 - Prob. 2PSACh. 1 - Prob. 3PSACh. 1 - Prob. 4PSACh. 1 - Prob. 5PSACh. 1 - Prob. 6PSACh. 1 - Prob. 8PSACh. 1 - Prob. 9PSACh. 1 - Prob. 10PSACh. 1 - Prob. 11PSACh. 1 - Prob. 12PSACh. 1 - Prob. 13PSACh. 1 - Prob. 14PSACh. 1 - Prob. 1PSBCh. 1 - Prob. 3PSBCh. 1 - Prob. 4PSBCh. 1 - Prob. 5PSBCh. 1 - Prob. 6PSBCh. 1 - Prob. 7PSBCh. 1 - Prob. 8PSBCh. 1 - Prob. 9PSBCh. 1 - Prob. 10PSBCh. 1 - Prob. 11PSBCh. 1 - Prob. 12PSBCh. 1 - Prob. 13PSBCh. 1 - Prob. 14PSBCh. 1 - Prob. 1SPCh. 1 - Prob. 2BTNCh. 1 - Prob. 7BTNCh. 1 - Prob. 9BTN
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