Principles of Financial Accounting.
24th Edition
ISBN: 9781260158601
Author: Wild
Publisher: MCG
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Chapter 17, Problem 5DQ
To determine
Suggest reasons why 2:1
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There are various limitations to employing the PE Ratio for company to company comparisons. Describe several of the limitations. A better measure would be to employ the PEG Ratio, how would you calculate?
Sargassum Caribbean Incorporated
Balance Sheet as at December 31, 2020
Assets
Liabilities
Current Assets:
Current Liabilities:
Cash
Accounts Payable
600,000
300,000
200,000
400,000 Notes Payable
900,000
1,500,000 Total Current Liabilities
Accounts Receivable
Inventory
Total Current Assets
900,000
Fixed Assets:
Long-Term Liabilities:
Property, Plant & Equipment
Less: Accumulated Depreciation
1,200,000 Long-Term Debt
1,000,000 Total Long Term Liabilities
200,000
300,000
300,000
Net Fixed Assets
Owners' Equity:
Common Stock ($1 Par)
Capital Surplus
Retained Earnings
Total Owners' Equity
100,000
300,000
100,000
500,000
1,700,000 Total Liabilities & Owners'
Equity
Total Assets
1,700,000
Sargassum Caribbean Incorporated
Income Statement for Year Ending December 31, 2020
Sales
Less: Cost of Goods Sold
Less: Administrative Expenses
Less Depreciation
Earnings Before Interest and
2,500,000
800,000
100,000
104,000
1,496,000
Тахes
Less: Interest Expense
Taxable Income
20.000
1,476,000
663,000…
Ratio analyses may not be helpful in explaining the performance of the company. Explain the limitations of using ratio analyses in a company. Relevant examples or illustrations should be given.
Chapter 17 Solutions
Principles of Financial Accounting.
Ch. 17 - A companys sales in the prior year were 300,000...Ch. 17 - Prob. 2MCQCh. 17 - What is Ella Companys acid-test ratio? a. 2.39 b....Ch. 17 - Prob. 4MCQCh. 17 - What is Ella Companys equity ratio? a. 25.78% b....Ch. 17 - Explain the difference between financial reporting...Ch. 17 - Prob. 2DQCh. 17 - Prob. 3DQCh. 17 - Prob. 4DQCh. 17 - Prob. 5DQ
Ch. 17 - Why is working capital given special attention in...Ch. 17 - What does the number of days sales uncollected...Ch. 17 - Prob. 8DQCh. 17 - Prob. 9DQCh. 17 - Prob. 10DQCh. 17 - Prob. 11DQCh. 17 - Prob. 12DQCh. 17 - Prob. 13DQCh. 17 - Refer to Apples financial statements in Appendix...Ch. 17 - Prob. 15DQCh. 17 - Prob. 16DQCh. 17 - Use Samsungs financial statements in Appendix A to...Ch. 17 - Prob. 1QSCh. 17 - Identify which standard of comparison, (a)...Ch. 17 - Prob. 3QSCh. 17 - Prob. 4QSCh. 17 - Prob. 5QSCh. 17 - Prob. 6QSCh. 17 - Mifflin Co. reported the following for the current...Ch. 17 - Prob. 8QSCh. 17 - Prob. 9QSCh. 17 - Prob. 10QSCh. 17 - Prob. 11QSCh. 17 - Prob. 12QSCh. 17 - Prob. 13QSCh. 17 - Prob. 14QSCh. 17 - Which of the following gains or losses would...Ch. 17 - Building blocks of analysis Match the ratio to the...Ch. 17 - Prob. 2ECh. 17 - Prob. 3ECh. 17 - Prob. 4ECh. 17 - Prob. 5ECh. 17 - Prob. 6ECh. 17 - Refer to Simon Companys balance sheets in Exercise...Ch. 17 - Prob. 8ECh. 17 - Prob. 9ECh. 17 - Prob. 10ECh. 17 - Prob. 11ECh. 17 - Prob. 12ECh. 17 - Prob. 13ECh. 17 - Prob. 14ECh. 17 - Prob. 15ECh. 17 - Prob. 16ECh. 17 - In the current year, Randa Merchandising, Inc.,...Ch. 17 - Use the financial data for Randa Merchandising,...Ch. 17 - Selected comparative financial statements of...Ch. 17 - Selected comparative financial statements of...Ch. 17 - Prob. 3APCh. 17 - Selected current year-end financial statements of...Ch. 17 - Comparative ratio analysis Summary information...Ch. 17 - Selected account balances from the adjusted trial...Ch. 17 - Prob. 1BPCh. 17 - Prob. 2BPCh. 17 - Prob. 3BPCh. 17 - Prob. 4BPCh. 17 - Summary information from the financial statements...Ch. 17 - Prob. 6BPCh. 17 - Prob. 17SPCh. 17 - Use Apples financial statements in Appendix A to...Ch. 17 - Prob. 2AACh. 17 - Prob. 3AACh. 17 - Prob. 1BTNCh. 17 - Prob. 3BTNCh. 17 - Prob. 5BTN
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