Survey Of Accounting
5th Edition
ISBN: 9781259631122
Author: Edmonds, Thomas P.
Publisher: Mcgraw-hill Education,
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Chapter 9, Problem 14E
To determine
Match the given ratio with the appropriate formula used to compute it.
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Students have asked these similar questions
Ratio
Industry Ratios
GnG Ratios
1. Current Ratio
5.3
2. Acid Test Ratio
5.1
3. Gross Profit Ratio
30%
4. Net Income Margin
7.5%
5. Receivable Turnover Ratio
9
6. Return on Asset Ratio
12%
7. Debt to Asset Ratio
1:4
Interpretation and verbal analysis compared to industry ratios:
1. Liquidity
2. Profitability
3. Solvency
Computations:
Current Assets
-
CurrentLiabilities
=
Calculated Value
1.
Working capital:
Ratio
Numerator
÷
Denominator
=
Calculated Value
2.
Current ratio
3.
Quick ratio
4.
Accounts receivable
turnover
5.
Number of days'
sales in receivables
6.
Inventory turnover
7.
Number of days'
sales in inventory
8.
Ratio of Fixed assets to
long-term liabilities
9.
Ratio of liabilities to
stockholders' equity
10.
Times interest earned
11.
Asset turnover
12.
Return on total assets…
Ratio
Industry Ratios
GnG Ratios
1. Current Ratio
5.3
7.08
2. Acid Test Ratio
5.1
6.8
3. Gross Profit Ratio
30%
40%
4. Net Income Margin
7.5%
18.2%
5. Receivable Turnover Ratio
9
14.41
6. Return on Asset Ratio
12%
9.29%
7. Debt to Asset Ratio
1:4
1 : 1
Interpretation and verbal analysis compared to industry ratios:
1. Liquidity
2. Profitability
3. Solvency
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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- 1- Calulate the following liquidity ratio: a. Current Ratio b. Quick Ratio 2-Calulate the following asset management ratios a. Average collection period b. Inventory Turnover c. Fixed-asset turnover d. Total asset turnover 3. Calculate the following financial leverage management ratios: a. debt ratio b. Debt-to-equity ratio c. Times interest earned ratio d. Fixed-charge coverage ratio 4. Calculate the following profitablity leverage management ratios a. Gross profit margin b. Net profit margin c. Return on investment d. Return on Stockholders' equity 5. Calculate the following market-based ratios: a. Price-to-earnings ratio b. Market price-to-book value ratioarrow_forwardAssignment 1: Financial Statement Analysis and Interpretation of the Results • Select two different corporations (from the same industry) publicly traded in the US Stock Exchange Markets. (NYSE, NASDAQ) o Make sure the companies you select are traded in same currency (USD, Euro, GBP) o Please get the approval for the names of the firm before you start your work. • The analysis of same company by different students will not be graded • Download the necessary financial statements for the companies for 2021 and 2020 o For data collection you can use: finance.yahoo.com or finance.google.com Part 1: Apply the financial analysis for the last two years using ratios covered in Chapter 3. Use excel formulas for calculation of the ratios on a separate sheet (manual calculations will not be graded!) You are not responsible for Part 5 (V. Market Value) ratios Some companies may not have all the data due to their variations in industries. If you face missing data just skip that ratio (mention as…arrow_forward27-A prepare the following: GROSS PROFIT RATIO PROFIT MARGIN RETURN ON ASSETS EARNINGS PER SHARE CURRENT RATIO ACID TEST RATIO DEBT RATIOarrow_forward
- MANCOSA POSTGRADUATE DIPLOMA IN PRORCT MANAGEMENT QUESTION REQUIRED Use the information provided below to calculate the following ratios. Where applicable, und e answers to two decimal places 111 Gross profe margin 312 Operating profit margin 31.3 invertory turnover period 31.4 Trade recelvatles peried 31.5 Trade payables period 31 316 Current ratio 3.1.7 Acid test ratio 3.18 Return on capital employed 32 Comment on the control ef debtors by Saturn imited Sugpest TWO 2) ways in which Saturn Limited can improve its operating profit margin. 33 INFORMATION Excerpts of financial data of Satum Limited for 2019 are as follows: STATEMENT OF COMPREHINSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2019 2600 00 Cost of sales Gros proft Operating profit 1400 000 600 000 40 000 S60 00 Interest expense Proft before tas Tan N STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER: 2019 2008 ASSETS Non-current assets Inventories Accounts recelvable 780000 500 000 240 000 120 000 45L000 1250 p0 EQUITY AND…arrow_forwardActivity 4: Compute the following financial ratios using the given financial statements below. Round off your answer to the nearest hundreds a. Gross profit ratio b. Operating income ratio c. Net profit ratio d. Return on asset (ROA) e. Return on equity (ROE) f. Asset turnover g. Fixed asset turnover h. Inventory turnover i.Days in Inventory j.Accounts receivables turnoverarrow_forwardDefinitional problems: Listed are 11 terms that relate to ratio analysis:1. Book value per share2.Inventoryturnover3. Debt-to-equity ratio4. Average collection period5. Average sales period6. Return on common equity7. Earnings per share8. Price/earnings ratio9. Return on total assets10. Current ratio11. Accounts-receivable turnoverChoose the financial ratio or term from the list that most appropriately completes each of the following statements:1. The__________ tends to have an effect on the market price per share asreflected in the price/earnings ratio.2. The__________ indicates whether a stock is relatively cheap or relativelyexpensive in relation to current earnings. 3. The________ measures the amount that would be distributed to holders of common stock if all assets were sold at their balance-sheet carrying amount and if all creditors were paid off.4. The_____________ is a rough measure of how many times a company'saccounts…arrow_forward
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