Common-size income statement and balance sheet for store AD.

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Answer 1

Question

Chapter 14, Problem 14.40BP

1.

To determine

To prepare: Common-size income statement and balance sheet for store AD.

2.

To determine

To compute: Ratio of gross profit to sales, ratio of operating income to sales, ratio of net income to sales for profitability analysis of store AD.

To conclude: The profit performance of Store AD with comparison to industry averages.

3.

To determine

To compute: Ratio of current assets to total assets, ratio of stockholders’ equity to total assets for financial position analysis of store AD.

To conclude: The financial position of Store AD with comparison to industry averages.

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OBJECTIVE: To enable learners to utilize financial ratios as a mechanism to evaluate the firm's financial performance and identify areas for making decisions for improvement REQUIREMENT: Financial Statement Analysis Question Refer to the following financial statements of Delima Corporation for 2019 and 2020: Delima Corporation Income Statements For the year ended 31 December (in millions) 2020 $13,198 7,750 2019 $12,397 7,108 Net sales Cost of goods sold Gross profit Selling and administrative expenses Income from operations 5,448 5,289 3,472 3,299 1,976 1,990 Interest expense 233 248 Other (income) expense, net 11 1,732 503 1,229 Income before income taxes 1,742 Income tax expense 502 Net income 1,240 Delima Corporation Balance Sheets 31 December (in millions) 2020 2019 Assets Current assets Cash $460 $444 Accounts receivables (net) 1,188 1,132 1,190 1,056 225 2,915 3,128 Inventories Other current assets 247 Total current assets 3,027 3,281 Property (net) 5,593 $11,901 Other assets…

With reference to a sales daybook, write an advice to the company on how daybooks can be adopted in developing an’’ enterprise wise’’ accounting system which can lead to complete, accurate and structured accounting information to be shown in the end year financial statements

Indicate in the following chart the most likely source of information for each business decision. Use M for managerial accounting information and F for financial accounting information. Business Decision 1. Determine whether to lend to a company 2. Evaluate a purchasing department’s performance 3. Report financial performance to board of directors . 4. Estimate product cost for a new line of shoes 5. Plan the budget for next quarter . 6. Measure profitability of an individual store 7. Prepare financial reports according to GAAP . 8. Determine location and size for a new plant

Answer 2

Question

Chapter 14, Problem 14.40BP

1.

To determine

To prepare: Common-size income statement and balance sheet for store AD.

2.

To determine

To compute: Ratio of gross profit to sales, ratio of operating income to sales, ratio of net income to sales for profitability analysis of store AD.

To conclude: The profit performance of Store AD with comparison to industry averages.

3.

To determine

To compute: Ratio of current assets to total assets, ratio of stockholders’ equity to total assets for financial position analysis of store AD.

To conclude: The financial position of Store AD with comparison to industry averages.

Expert Solution & Answer

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Answer 3

Question

Chapter 14, Problem 14.40BP

1.

To determine

To prepare: Common-size income statement and balance sheet for store AD.

2.

To determine

To compute: Ratio of gross profit to sales, ratio of operating income to sales, ratio of net income to sales for profitability analysis of store AD.

To conclude: The profit performance of Store AD with comparison to industry averages.

3.

To determine

To compute: Ratio of current assets to total assets, ratio of stockholders’ equity to total assets for financial position analysis of store AD.

To conclude: The financial position of Store AD with comparison to industry averages.

Expert Solution & Answer

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Answer 4

Question

Chapter 14, Problem 14.40BP

1.

To determine

To prepare: Common-size income statement and balance sheet for store AD.

2.

To determine

To compute: Ratio of gross profit to sales, ratio of operating income to sales, ratio of net income to sales for profitability analysis of store AD.

To conclude: The profit performance of Store AD with comparison to industry averages.

3.

To determine

To compute: Ratio of current assets to total assets, ratio of stockholders’ equity to total assets for financial position analysis of store AD.

To conclude: The financial position of Store AD with comparison to industry averages.

Expert Solution & Answer

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Answer 5

Chapter 14, Problem 14.40BP

1.

To determine

To prepare: Common-size income statement and balance sheet for store AD.

2.

To determine

To compute: Ratio of gross profit to sales, ratio of operating income to sales, ratio of net income to sales for profitability analysis of store AD.

To conclude: The profit performance of Store AD with comparison to industry averages.

3.

To determine

To compute: Ratio of current assets to total assets, ratio of stockholders’ equity to total assets for financial position analysis of store AD.

To conclude: The financial position of Store AD with comparison to industry averages.

Answer 6

Chapter 14, Problem 14.40BP

1.

To determine

To prepare: Common-size income statement and balance sheet for store AD.

Answer 7

Chapter 14, Problem 14.40BP

1.

To determine

To prepare: Common-size income statement and balance sheet for store AD.

Answer 8

2.

To determine

To compute: Ratio of gross profit to sales, ratio of operating income to sales, ratio of net income to sales for profitability analysis of store AD.

To conclude: The profit performance of Store AD with comparison to industry averages.

Answer 9

2.

To determine

To compute: Ratio of gross profit to sales, ratio of operating income to sales, ratio of net income to sales for profitability analysis of store AD.

To conclude: The profit performance of Store AD with comparison to industry averages.

Answer 10

3.

To determine

To compute: Ratio of current assets to total assets, ratio of stockholders’ equity to total assets for financial position analysis of store AD.

To conclude: The financial position of Store AD with comparison to industry averages.

Answer 11

3.

To determine

To compute: Ratio of current assets to total assets, ratio of stockholders’ equity to total assets for financial position analysis of store AD.

To conclude: The financial position of Store AD with comparison to industry averages.

Answer 12

Expert Solution & Answer

Answer 13

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Answer 14

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Answer 15

Ch. 14 - (Learning Objective 1) Which of the following...Ch. 14 - Prob. 2QC Ch. 14 - Prob. 3QC Ch. 14 - Prob. 4QC Ch. 14 - (Learning Objective 3) Which of the following is...Ch. 14 - (Learning Objective 4) Working capital is defined...Ch. 14 - Prob. 7QC Ch. 14 - Prob. 8QC Ch. 14 - Prob. 9QC Ch. 14 - Prob. 10QC

Common-size income statement and balance sheet for store AD.

Solution Summary: The author explains the common-size income statement and balance sheet used to compare the income statements of companies of different sizes.

Videos

To prepare: Common-size income statement and balance sheet for store AD.

To compute: Ratio of gross profit to sales, ratio of operating income to sales, ratio of net income to sales for profitability analysis of store AD.

To conclude: The profit performance of Store AD with comparison to industry averages.

To compute: Ratio of current assets to total assets, ratio of stockholders’ equity to total assets for financial position analysis of store AD.

To conclude: The financial position of Store AD with comparison to industry averages.

Want to see the full answer?

Chapter 14 Solutions

Common-size income statement and balance sheet for store AD.

Solution Summary: The author explains the common-size income statement and balance sheet used to compare the income statements of companies of different sizes.

Videos

To prepare: Common-size income statement and balance sheet for store AD.

To compute: Ratio of gross profit to sales, ratio of operating income to sales, ratio of net income to sales for profitability analysis of store AD. To conclude: The profit performance of Store AD with comparison to industry averages.

To compute: Ratio of current assets to total assets, ratio of stockholders’ equity to total assets for financial position analysis of store AD. To conclude: The financial position of Store AD with comparison to industry averages.

Want to see the full answer?

Chapter 14 Solutions

To compute: Ratio of gross profit to sales, ratio of operating income to sales, ratio of net income to sales for profitability analysis of store AD.

To conclude: The profit performance of Store AD with comparison to industry averages.

To compute: Ratio of current assets to total assets, ratio of stockholders’ equity to total assets for financial position analysis of store AD.

To conclude: The financial position of Store AD with comparison to industry averages.