Survey Of Accounting
5th Edition
ISBN: 9781259631122
Author: Edmonds, Thomas P.
Publisher: Mcgraw-hill Education,
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Chapter 9, Problem 10E
To determine
Determine the times interest earned ratio of Corporation F for 2018.
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FINANCIAL RATIO:
Requirement: Compute for the following financial ratios for the year 2021 (round-off answers to two decimal places)
a. Current ratio
b. Quick (Acid-test) ratio
c. Working capital
d. Inventory turnover
e. Days of inventory (use 365 days)
f. Accounts receivable turnover (assume all sales are on credit)
g. Days of receivable (use 365 days)
h. Debt ratio
i. Equity ratio
j. Debt-to-equity ratio
k. Gross profit ratio
1. Net profit ratio
m. Return on assets
n. Return on equity
Balance Sheet
i. What are Mydeco’s Accounts Receivable (A/R) in 2019? What is their percentage increase since 2015?
ii. What could be one reason as to why Goodwill and Intangibles are unchanged over the 2015 to 2019 period? Long-term debt increases by $100 million over the 2015-2019 period. Looking at the asset side of the balance sheet, what was the borrowing used for?
Ratio of liabilities to owner's equity
The following data were taken from Mesa Company's balance sheet:
Dec. 31,2019
Dec. 31,2018
Total liabilities
$547,000
$518,000
Total owner's equity
415,000
370,000
a. Compute the ratio of liabilities to owner's equity.b. Has the creditor's risk increased or decreased from December 31,2018, to December 31, 2019?
Chapter 9 Solutions
Survey Of Accounting
Ch. 9 - 1. Why are ratios and trends used in financial...Ch. 9 - Prob. 2QCh. 9 - Prob. 3QCh. 9 - 4. What is the significance of inventory turnover,...Ch. 9 - 5. What is the difference between the current...Ch. 9 - Prob. 6QCh. 9 - Prob. 7QCh. 9 - Prob. 8QCh. 9 - 9. What are some limitations of the earnings per...Ch. 9 - Prob. 10Q
Ch. 9 - Prob. 11QCh. 9 - Prob. 12QCh. 9 - Prob. 13QCh. 9 - Prob. 14QCh. 9 - Exercise 9-1 Horizontal analysis Winthrop...Ch. 9 - Prob. 2ECh. 9 - Prob. 3ECh. 9 - Prob. 4ECh. 9 - Prob. 5ECh. 9 - Prob. 6ECh. 9 - Prob. 7ECh. 9 - Prob. 8ECh. 9 - Comprehensive analysis The December 31, 2019,...Ch. 9 - Prob. 10ECh. 9 - Prob. 11ECh. 9 - Prob. 12ECh. 9 - Ratio analysis Compute the specified ratios using...Ch. 9 - Prob. 14ECh. 9 - LO 13-2, 13-3, 13-4, 13-5 Exercise 13-15A...Ch. 9 - Prob. 16PCh. 9 - Prob. 17PCh. 9 - Prob. 18PCh. 9 - Prob. 19PCh. 9 - Prob. 20PCh. 9 - Problem 9-21 Ratio analysis Selected data for...Ch. 9 - Prob. 22PCh. 9 - Problem 9-23 Ratio analysis The following...Ch. 9 - Prob. 24PCh. 9 - Prob. 1ATCCh. 9 - Prob. 3ATCCh. 9 - ATC 9-5 Ethical Dilemma Making the ratios look...
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- Debt Management and Short-Term Liquidity Ratios The following items appear on the balance sheet of Figgins Company at the end of 2018 and 2019: Required: Between 2018 and 2019, indicate whether Figgins debt to equity ratio increased or decreased. Also, indicate whether Figgins current ratio increased or decreased. Interpret these ratios.arrow_forwardUsing the following select financial statement information from Black Water Industries, compute the accounts receivable turnover ratios for 2018 and 2019 (round answers to two decimal places). What do the outcomes tell a potential investor about Black Water Industries?arrow_forwardUsing the following select financial statement information from Black Water Industries, compute 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 Black Water Industries?arrow_forward
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- Computing rate of return on total assets Barot’s 2018 financial statements reported the following items—with 2017 figures given for comparison: Net income for 2018 was $3,910, and interest expense was $240. Compute Barot’s rate of return on total assets for 2018. (Round to the nearest percent.)arrow_forwardQuestion for income statement : BAYAN INVESTMENT CO. (K.S.C.P) a. List 2 expense accounts AND their amounts for 2020. b. What was the net profit/(loss) for 2020? What about 2019? c. Compared with 2019, has the net profit/(loss) increased or decreased?arrow_forwardPrepare the income statements and balance sheets for years 2018 and 2019 for Thompson Company using the following information. The balance sheet numbers are at the end of year figures.Item20182019Accounts Payable120.0150.0Accounts Receivable150.0180.0Accumulated Depreciation330.0360.0Cash & Cash Equivalents10.012.0Common Stock150.0200.0Cost of Goods Sold750.0850.0Depreciation25.030.0Interest Expense30.033.0Inventory200.0180.0Long-term Debt150.0150.0Gross Plant & Equipment650.0780.0Retained Earnings208.5225.0Sales1,500.01,700.0SG&A Expenses500.0570.0Notes Payable51.567.0Tax Rate21%21%(2) Answer the following questions:(a) How much did Thompson Company spend in acquiring fixed assets in 2019?(b) How much dividend did Thompson Company pay out during 2019?(c) Using the end of year numbers, did the long-term solvency ratios improve or deteriorate from 2018 to 2019? Answer this question using at least two long-term solvency ratios.(d) Using the end of year numbers, did the asset…arrow_forward
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