Long-term debt ratio Times interest earned Current ratio Quick ratio Cash ratio Inventory turnover Average collection period INCOME STATEMENT (Figures in 5 millions) Net sales Cost of goods sold Selling, general, and administrative expenses Depreciation Eamings before interest and taxes (EBIT) Interest expense Income before tax Tax (35% of income before tax) Net income Use the above information from the tables to work out the following missing entries, and then calculate the company's return on equity. Note: Turnover and the average collection period are calculated using start-of-year, not average, values. (Enter your answers in millions. Round intermediate calculations and final answers to 2 decimal places.) Assets Cash and marketable securities Accounts receivable Inventories 0.1 10.0 Total current assets Net property, plant, and equipment Total assets Liabilities and shareholders' equity Accounts payable Notes payable Total current liabilities 1.6 1.0 0.4 Long-term debt Shareholders' equity Total liabilities and shareholders' equity 4.0 BALANCE SHEET (Figures in $ millions) 73 days $ This Year $ $ $ 19.53 26.00 36.00 Last Year $ $ $ 20.00 $ 35.00 55.00 $ 36 50 42 128 41 169 15 40 55 20 94 169

Long-term debt ratio Times interest earned Current ratio Quick ratio Cash ratio Inventory turnover Average collection period INCOME STATEMENT (Figures in 5 millions) Net sales Cost of goods sold Selling, general, and administrative expenses Depreciation Eamings before interest and taxes (EBIT) Interest expense Income before tax Tax (35% of income before tax) Net income Use the above information from the tables to work out the following missing entries, and then calculate the company's return on equity. Note: Turnover and the average collection period are calculated using start-of-year, not average, values. (Enter your answers in millions. Round intermediate calculations and final answers to 2 decimal places.) Assets Cash and marketable securities Accounts receivable Inventories 0.1 10.0 Total current assets Net property, plant, and equipment Total assets Liabilities and shareholders' equity Accounts payable Notes payable Total current liabilities 1.6 1.0 0.4 Long-term debt Shareholders' equity Total liabilities and shareholders' equity 4.0 BALANCE SHEET (Figures in $ millions) 73 days $ This Year $ $ $ 19.53 26.00 36.00 Last Year $ $ $ 20.00 $ 35.00 55.00 $ 36 50 42 128 41 169 15 40 55 20 94 169

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 31BEB

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