Managerial Accounting: Tools for Business Decision Making
7th Edition
ISBN: 9781118334331
Author: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
Publisher: WILEY
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Chapter 14, Problem 14.7AP
To determine
Financial Ratio: The financial ratios examine the performance of the company and used in comparing with other same business. It indicates the relationship of two or more parts of financial statements.
To determine: Missing amounts under ratios.
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Financial information for Powell Panther Corporation is shown below:
Powell Panther Corporation: Income Statements for Year Ending December 31 (Millions of Dollars)
2018
2017
Sales
$
1,800.0
$
1,500.0
Operating costs excluding depreciation and amortization
1,395.0
1,275.0
EBITDA
$
405.0
$
225.0
Depreciation and amortization
43.0
39.0
Earnings before interest and taxes (EBIT)
$
362.0
$
186.0
Interest
40.0
33.0
Earnings before taxes (EBT)
$
322.0
$
153.0
Taxes (40%)
128.8
61.2
Net income
$
193.2
$
91.8
Common dividends
$
174.0
$
73.0
Powell Panther Corporation: Balance Sheets as of December 31 (Millions of Dollars)
2018
2017
Assets
Cash and equivalents
$
23.0
$
18.0
Accounts receivable
248.0
225.0
Inventories
396.0
360.0
Total current assets
$
667.0
$
603.0
Net plant and equipment
429.0
390.0
Total assets
$
1,096.0
$
993.0
Liabilities and Equity
Accounts…
Financial Statements for Royal Corporation
Actual 2016 and Pro Forma 2017 ($ millions)
Income Statement
Net sales
Cost of goods sold
Other expenses
Depreciation expense
EBIT
Interest expense
Earnings before tax
Tax
Net income
Dividends paid
90
Add. to retained earnings $ 269
O $4,563
O $4,663
$4.453
2016
2017
$ 47,616 $52,378 Cash & securities
40,718
44,790 Accounts receivable
5,171
5,688 Inventories
1,000
1,100
727
800
215
215
512
585
154
176
$ 359
$ 409
$5,663
Balance Sheet
102
Net fixed assets
Total assets
Bank loan (short-term)
Accounts payable
Long-term debt
Total liabilities
2016
$951
2017
$1,046
5,666
6,233
4,236 4,660
4,048
14,901
$392
In the above financial statements, Royal Corporation has prepared (incomplete) pro forma financial
statements for 2017 based on actual financial statements for 2016. Royal Corp. used the percent-
of-sales method, assuming a sales growth rate of 10% for 2017. If capital expenditures are planned
to be $1,615 in 2017, then what would be the…
Financial information for Powell Panther Corporation is shown below:
Powell Panther Corporation: Income Statements for Year Ending December 31 (Millions of Dollars)
2018
2017
Sales
$
3,900.0
$
3,000.0
Operating costs excluding depreciation and amortization
2,925.0
2,550.0
EBITDA
$
975.0
$
450.0
Depreciation and amortization
90.0
69.0
Earnings before interest and taxes (EBIT)
$
885.0
$
381.0
Interest
86.0
66.0
Earnings before taxes (EBT)
$
799.0
$
315.0
Taxes (40%)
319.6
126.0
Net income
$
479.4
$
189.0
Common dividends
$
431.0
$
151.0
Powell Panther Corporation: Balance Sheets as of December 31 (Millions of Dollars)
2018
2017
Assets
Cash and equivalents
$
38.0
$
30.0
Accounts receivable
432.0
360.0
Inventories
819.0
630.0
Total current assets
$
1,289.0
$
1,020.0
Net plant and equipment
897.0
690.0
Total assets
$
2,186.0
$
1,710.0
Liabilities and Equity…
Chapter 14 Solutions
Managerial Accounting: Tools for Business Decision Making
Ch. 14 - (a) Jose Ramirez believes that the analysis of...Ch. 14 - (a) Distinguish among the following bases of...Ch. 14 - Prob. 3QCh. 14 - Prob. 4QCh. 14 - Prob. 5QCh. 14 - Prob. 6QCh. 14 - Prob. 7QCh. 14 - What do the following classes of ratios measure?...Ch. 14 - What is the difference between the current ratio...Ch. 14 - Hizar Company, a retail store, has an accounts...
Ch. 14 - Which ratios should be used to help answer the...Ch. 14 - The price-earnings ratio of General Motors...Ch. 14 - What is the formula for computing the payout...Ch. 14 - Holding all other factors constant, indicate...Ch. 14 - Prob. 15QCh. 14 - Prob. 16QCh. 14 - Prob. 17QCh. 14 - Prob. 18QCh. 14 - Prob. 19QCh. 14 - Why is it important to report discontinued...Ch. 14 - You are considering investing in Wingert...Ch. 14 - Prob. 22QCh. 14 - Prob. 23QCh. 14 - You recently received a letter from your Uncle...Ch. 14 - Prob. 14.2BECh. 14 - Using the following data from the comparative...Ch. 14 - Using the same data presented above in BE14-3 for...Ch. 14 - Net income was 500,000 in 2016, 450,000 in 2017,...Ch. 14 - Prob. 14.6BECh. 14 - Prob. 14.7BECh. 14 - Prob. 14.8BECh. 14 - Prob. 14.9BECh. 14 - Prob. 14.10BECh. 14 - The following data are taken from the financial...Ch. 14 - Prob. 14.12BECh. 14 - Prob. 14.13BECh. 14 - Prob. 14.14BECh. 14 - On June 30. Holloway Corporation discontinued its...Ch. 14 - Prob. 14.1DICh. 14 - Prob. 14.2DICh. 14 - In its proposed 2017 income statement. Hrabik...Ch. 14 - Financial information for Kurzen Inc. is presented...Ch. 14 - Operating data for Navarro Corporation are...Ch. 14 - The comparative condensed balance sheets of Gurley...Ch. 14 - The comparative condensed income statements of...Ch. 14 - Suppose Nordstrom, Inc., which operates department...Ch. 14 - Keener Incorporated had the following transactions...Ch. 14 - Frizell Company has the following comparative...Ch. 14 - Prob. 14.8ECh. 14 - Prob. 14.9ECh. 14 - Prob. 14.10ECh. 14 - Wiemers Corporations comparative balance sheets...Ch. 14 - Prob. 14.12ECh. 14 - Prob. 14.13ECh. 14 - Comparative statement data for Farris Company and...Ch. 14 - The comparative statements of Painter Tool Company...Ch. 14 - Prob. 14.3APCh. 14 - Financial information for Messersmith Company is...Ch. 14 - Prob. 14.5APCh. 14 - Prob. 14.6APCh. 14 - Prob. 14.7APCh. 14 - Prob. 14.8APCh. 14 - Prob. 14.9APCh. 14 - Financial Reporting Problem: Apple Inc. Your...Ch. 14 - PepsiCos financial statements are presented at...Ch. 14 - Prob. 14.3BYPCh. 14 - As the CPA for Gandara Manufacturing Inc., you...Ch. 14 - The Management Discussion and Analysis section of...Ch. 14 - Prob. 14.6BYPCh. 14 - Dave Schonhardt, president of Schonhardt...
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Financial ratio analysis; Author: The Finance Storyteller;https://www.youtube.com/watch?v=MTq7HuvoGck;License: Standard Youtube License