Financial And Managerial Accounting
15th Edition
ISBN: 9781337902663
Author: WARREN, Carl S.
Publisher: Cengage Learning,
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Textbook Question
Chapter 7, Problem 2MAD
Analyze and compare J. C. Penney and Macy’s
J. C. Penney Company, Inc. (JCP) and Macy’s, Inc. (M) are large department store chains in the United States. Information from recent annual reports for both companies is as follows (in millions):
- a. Determine the days’ cash on hand for each company. Round to one decimal place.
- b. Which company has the better liquidity position?
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10. Review the select information for Bean Superstore and
Legumes Plus (industry competitors), and then complete the
following.
A. Compute the accounts receivable turnover ratios for each
company
for 2018 and 2019.
B. Compute the number of days' sales in receivables ratios for
each company for 2018 and 2019.
C. Determine which company is the better investment and why.
Round answers to two decimal places.
BEAN SUPERSTORE
LEGUMES PLUS
Comparative Balance Sheet
December 31, 2017, 2018, and 2019
Comparative Balance Sheet
December 31, 2017, 2018, and 2019
2019
2018
2017
2019
2018
2017
Assets
Cash
$345,600
67,000
145,830
100,465
$330,460
62,000
178,011
101,202
$300,000
59,000
155,205
103,085
$407,000
85,430
128,080
182,006
$386,450
82,670
40,036
23,400
$356,367
79,230
52,142
111,701
Accounts Receivable
Inventory
Equipment
Total Assets
$658,895
$671,673
$617,290
$802,516
$532,556
$599,440
Liabilities
Salaries Payable
Accounts Payable
Notes Payable
$ 91,455
$ 90,200
70,000
41,000
$ 88,563…
10. Review the select information for Bean Superstore and Legumes Plus (industry
competitors), and then complete the following.
A. Compute the accounts receivable turnover ratios for each company for 2018 and 2019.
B Compute the number of days sales in receivables ratios for each company for 2018 and
2019
C. Determine which company is the better investment and why. Round answers to two
decimal places.
A firm’s Balance Sheet and Income Statement for FY 2021 is displayed below and in the in the attached excel file. Answer the following questions.
NOTE: For this question, use the end-of-the year approach (and not the mid-year convention). For example, this means that days receivables = end of FY receivables/daily sales; similarly for the remaining relevant ratios.
You may use the tables below
BALANCE SHEET
2021
Cash and cash equivalents
280
Receivables
2588
Inventory
2516
Other
189
TOTAL CA
5573
Fixed assets
5024
TOTAL ASSETS
10597
Accounts payable
4713
Short term debt
78
TOTAL CL
4790
LT debt
921
Shareh. Equity
4886
TOTAL LIAB. AND SHARH. EQUITY
10597
INCOME STATEMENT
2021
Sales
19418
COGS
13136
Depreciation
354
SG&A
4952
EBIT
976
Interest Expenses
52
Tax
268
Net income
656
Decompose the return on equity for the FY 2021…
Chapter 7 Solutions
Financial And Managerial Accounting
Ch. 7 - Prob. 1DQCh. 7 - Why should the employee who handles cash receipts...Ch. 7 - Prob. 3DQCh. 7 - Why should the responsibility for maintaining the...Ch. 7 - Prob. 5DQCh. 7 - Prob. 6DQCh. 7 - Prob. 7DQCh. 7 - Prob. 8DQCh. 7 - Prob. 9DQCh. 7 - Prob. 10DQ
Ch. 7 - Prob. 1BECh. 7 - Prob. 2BECh. 7 - Prob. 3BECh. 7 - Prob. 4BECh. 7 - Prob. 5BECh. 7 - Sarbanes-Oxley internal control report Using...Ch. 7 - Prob. 2ECh. 7 - Prob. 3ECh. 7 - Prob. 4ECh. 7 - Prob. 5ECh. 7 - Prob. 6ECh. 7 - Prob. 7ECh. 7 - Prob. 8ECh. 7 - Prob. 9ECh. 7 - Prob. 10ECh. 7 - Prob. 11ECh. 7 - Entry for cash sales; cash short The actual cash...Ch. 7 - Entry for cash sales; cash over The actual cash...Ch. 7 - Prob. 14ECh. 7 - Prob. 15ECh. 7 - Prob. 16ECh. 7 - Prob. 17ECh. 7 - Prob. 18ECh. 7 - Prob. 19ECh. 7 - Prob. 20ECh. 7 - Prob. 21ECh. 7 - Prob. 22ECh. 7 - Prob. 23ECh. 7 - Prob. 24ECh. 7 - Prob. 1PACh. 7 - Prob. 2PACh. 7 - Prob. 3PACh. 7 - Prob. 4PACh. 7 - Prob. 5PACh. 7 - Prob. 1PBCh. 7 - Prob. 2PBCh. 7 - Prob. 3PBCh. 7 - Prob. 4PBCh. 7 - Prob. 5PBCh. 7 - Analyze and compare Amazon.com to Netflix...Ch. 7 - Analyze and compare J. C. Penney and Macys J. C....Ch. 7 - Prob. 3MADCh. 7 - Prob. 4MADCh. 7 - Analyze and compare Nike, lululemon, and Under...Ch. 7 - Ethics in Action Tehra Dactyl is an accountant for...Ch. 7 - Bank error During the preparation of the bank...Ch. 7 - Prob. 4TIFCh. 7 - Prob. 5TIF
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Identify the ratio that is relevant to answering each of the following questions.a. How much net income does the company earn from each dollar of sales?b. Is the company financed primarily by debt or equity?c. How many dollars of sales were generated for each dollar invested in fixed assets?d. How many days, on average, does it take the company to collect on credit sales made tocustomers?e. How much net income does the company earn for each dollar owners have invested in it?f. Does the company have sufficient assets to convert into cash for paying liabilities as theycome due in the upcoming year?arrow_forwardA firm’s Balance Sheet and Income Statement for FY 2021 is displayed below and in the in the attached excel file. Answer the following questions. NOTE: For this question, use the end-of-the year approach (and not the mid-year convention). For example, this means that days receivables = end of FY receivables/daily sales; similarly for the remaining relevant ratios. You may use the tables below BALANCE SHEET 2021 Cash and cash equivalents 280 Receivables 2588 Inventory 2516 Other 189 TOTAL CA 5573 Fixed assets 5024 TOTAL ASSETS 10597 Accounts payable 4713 Short term debt 78 TOTAL CL 4790 LT debt 921 Shareh. Equity 4886 TOTAL LIAB. AND SHARH. EQUITY 10597 INCOME STATEMENT 2021 Sales 19418 COGS 13136 Depreciation 354 SG&A 4952 EBIT 976 Interest Expenses 52 Tax 268 Net income 656 Determine the NLF, NSF and the liquidity ratio…arrow_forwardAlex is currently considering to invest his money in one of the companies betweenCompany A and Company B. The summarized final accounts of the companies for theirlast completed financial year are as follows: (refer to the images) Required:a. Calculate the following ratios for Company A and Company B. State clearly theformulae used for each ratio:i. Gross Profit Marginii. Net Profit Marginiii. Inventory Turnover Period (days)iv. Receivables Collection Period (days)v. Payables Payment Period (days)vi. Current Ratiovii. Quick Ratiob. Comment on each of the ratios calculated in part (a) above.arrow_forward
- Analyze and compare Apple, Coca-Cola, and Verizon Financial information for Apple Inc. (AAPL), The Coca-Cola Company (KO), and Verizon Communications (VZ) follows (in millions): a. Compute the free cash flow for each company. b. Compute the ratio of free cash flow to sales for each company. Round to one decimal place. c. Which company has the greatest free cash flow? d. How does Verizon differ from the other two companies?arrow_forwardReview the select information for Bean Superstore and Legumes Plus (industry competitors), and then complete the following. A. Compute the accounts receivable turnover ratios for each company for 2018 and 2019. B. Compute the number of days sales in receivables ratios for each company for 2018 and 2019. C. Determine which company is the better investment and why. Round answers to two decimal places.arrow_forwardAnalyze and compare Hilton and Marriott Hilton Worldwide Holdings, Inc. (HLT) and Marriott International, Inc. (MAR) are two of the largest hotel operators in the world. Selected financial information from recent income statements for both companies follows (in millions): a. Compute the times interest earned ratio for each company. Round to one decimal place. b. Which company appears to better protect creditor interest? Why?arrow_forward
- Last year, Nikkola Company had net sales of 2.299.500,000 and cost of goods sold of 1,755,000,000. Nikkola had the following balances: Refer to the information for Nikkola Company above. Required: Note: Round answers to one decimal place. 1. Calculate the average accounts receivable. 2. Calculate the accounts receivable turnover ratio. 3. Calculate the accounts receivable turnover in days.arrow_forwardAnalyze and compare Zynga, Electronic Arts, and Take-Two Data (in millions) from recent financial statements of Zynga Inc. (ZNGA), Electronic Arts Inc. (EA), and Take-Two Interactive Software, Inc. (TTWO) are as follows: a. Compute the working capital for Year 2 and Year 1 for each company. b. Which company has the largest working capital? c. Compute the current ratio for Year 2 and Year 1 for each company. Round to one decimal place. d. For Year 2, rank the companies from most liquid to least liquid based upon the current ratio.arrow_forwardThe following select financial statement information from Vortex Computing. Compute the accounts receivable turnover ratios and the number of days sales in receivables ratios for 2018 and 2019 (round answers to two decimal places). What do the outcomes tell a potential investor about Vortex Computing if industry average for accounts receivable turnover ratio is 4 times and days sales in receivables ratio is 85 days?arrow_forward
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