HORNGREN'S FINANCIAL & MANGERIAL ACCOUNT
7th Edition
ISBN: 9780136505273
Author: MILLER-NOBLES
Publisher: PEARSON
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Textbook Question
Chapter 15, Problem 3QC
Vertical analysis of Liberty's balance sheet for 2017 would report
a. Cash as 9.50% of total assets.
b. inventory turnover of 6 times.
c. a
d. a 17% increase in Cash.
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Liberty Corporation reported the following figures:
Account
2016
2015
Cash and cash equivalents
$ 2 450
$ 2 094
Receivables
1 813
1611
Inventory
1 324
1 060
Prepaid expenses
1 709
2 120
Total current assets
$ 7 296
$ 6 885
Other assets
18 500
15 737
$25 796
$ 7 230
Total assets
$22 622
Total current liabilities
$ 8 467
Non-current liabilities
4 798
3 792
Share capital
6 568
4 363
Retained earnings
7 200
6 000
Total liabilities and equity
$25 796
$22 622
2006
Sales
$20 941
Cost of sales
7 055
Selling and general expenses
7 065
Interest expense
210
Income tax expense
2 563
Profit
$ 4 048
Calculate each of following ratios for year 2017 using the financial statement in Table 1-3.
Accounts receivable turnover
Days sales outstanding (DSO)
Accounts payable turnover
Days payable outstanding (DPO)
Total Asset turnover
Fixed asset turnover
Liquidity Ratio
Current ratio
Quick ratio
Liability to assets
Interest coverage ratio
Profitability Ratios
ROA
ROE
Gross profit margin
Operating profit margin
Net operating profit margin
Table 1: Balance Sheet Statement for 2017
Cash $7,282
Short-Term invest. 20,000
Accounts Receivable 632,160
Inventories 1,287,360
Total Current Assets 1,946,802
Gross Property, Plant & Equipment 1,202,950
Less: Depreciation 263,160
Net Property, Plant & Equipment 939,790
Total assets $2,886,592
Accounts payable $324,000
Notes payable 720,000
Accruals 284,960
Total Current Liability 1,328,960
Long-term debt 1,000,000
Common stock 460,000
Retained earnings 97,632
Total equity 557,632
Total Liability & Equity $2,886,592
Table 2:…
Calculate each of following ratios for year 2017 using the financial statement in Table 1-3.
Total Asset turnover
Fixed asset turnover
Liquidity Ratio
Current ratio
Quick ratio
Liability to assets
Interest coverage ratio
Profitability Ratios
ROA
ROE
Gross profit margin
Operating profit margin
Net operating profit margin
Table 1: Balance Sheet Statement for 2017
Cash $7,282
Short-Term invest. 20,000
Accounts Receivable 632,160
Inventories 1,287,360
Total Current Assets 1,946,802
Gross Property, Plant & Equipment 1,202,950
Less: Depreciation 263,160
Net Property, Plant & Equipment 939,790
Total assets $2,886,592
Accounts payable $324,000
Notes payable 720,000
Accruals 284,960
Total Current Liability 1,328,960
Long-term debt 1,000,000
Common stock 460,000
Retained earnings 97,632
Total equity 557,632
Total Liability & Equity $2,886,592
Table 2:
Income Statement for 2017
Sales $5,834,400
COGS 4,980,000
Depreciation 116,960
Other expenses…
Chapter 15 Solutions
HORNGREN'S FINANCIAL & MANGERIAL ACCOUNT
Ch. 15 - What part of the Libertys annual report is written...Ch. 15 - Horizontal analysis of Liberty's balance sheet for...Ch. 15 - Vertical analysis of Liberty's balance sheet for...Ch. 15 - Which statement best describes Liberty's acid-test...Ch. 15 - Liberty's inventory turnover during 2017 was...Ch. 15 - Prob. 6QCCh. 15 - Prob. 7QCCh. 15 - Liberty's rate of return on common stockholders'...Ch. 15 - The company has 2,500 shares of common stock...Ch. 15 - What ate the three main ways to analyze financial...
Ch. 15 - What is an annual report? Briefly describe the key...Ch. 15 - Prob. 3RQCh. 15 - What is trend analysis, and how does it differ...Ch. 15 - Prob. 5RQCh. 15 - Prob. 6RQCh. 15 - Prob. 7RQCh. 15 - Briefly describe the ratios that can be used to...Ch. 15 - Prob. 9RQCh. 15 - Briefly describe the ratios that can be used to...Ch. 15 - Briefly describe the ratios that can be used to...Ch. 15 - Prob. 12RQCh. 15 - Prob. 13RQCh. 15 - Prob. 15.1SE
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Financial ratio analysis; Author: The Finance Storyteller;https://www.youtube.com/watch?v=MTq7HuvoGck;License: Standard Youtube License