Concept introduction:
Common-size percent:
Common-size percent is a tool of financial statement analysis. This tells about the percent of each item in compare to total value. In other words we can say that with the help of common-size percent, management can know the position of each item of
Gross margin ratio:
Gross margin ratio is a profitability ratio which show relationship between gross margin and sales. In other words we can say that gross margin ratio shows how much percentage of sales is in excess of cost of sales.
Requirement 1:
Common-size percents of Apple and Google companies.
Concept introduction:
Common-size percent:
Common-size percent is a tool of financial statement analysis. This tells about the percent of each item in compare to total value. In other words we can say that with the help of common-size percent, management can know the position of each item of balance sheet & income statement.
Gross margin ratio:
Gross margin ratio is a profitability ratio which show relationship between gross margin and sales. In other words we can say that gross margin ratio shows how much percentage of sales is in excess of cost of sales.
Requirement 2:
To explain:
Would retained earnings as a percent of total assets increase or decrease?
Concept introduction:
Common-size percent:
Common-size percent is a tool of financial statement analysis. This tells about the percent of each item in compare to total value. In other words we can say that with the help of common-size percent, management can know the position of each item of balance sheet & income statement.
Gross margin ratio:
Gross margin ratio is a profitability ratio which show relationship between gross margin and sales. In other words we can say that gross margin ratio shows how much percentage of sales is in excess of cost of sales.
Requirement 3:
Which compny has a higher gross margin ratio on sales?
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Managerial Accounting
- The average liabilities, average stockholders' equity, and average total assets are as follows: 1. Determine the following ratios for both companies, rounding ratios and percentagesto one decimal place: a. Return on total assets b. Return on stockholders' equity c. Times interest earned d. Ratio of total liabilities to stockholders' equity 2. Based on the information in (1), analyze and compare the two companies'solvency and profitability. Comprehensive profitability and solvency analysis Marriott International, Inc., and Hyatt Hotels Corporation are two major owners and managers of lodging and resort properties in the United States. Abstracted income statement information for the two companies is as follows for a recent year (in millions): Balance sheet information is as follows:arrow_forwardIdentify how each of the following transactions affects the company's financial statements. For the balance sheet, Identify how each transaction affects total assets, total llabilities, and equity. For the Income statement, Identify how each transaction affects profit. If there is an Increase, select a *+" In the column or columns. If there is a decrease, select a "-" In the column or columns. If there is both an Increase and a decrease, select a *+/-" In the column or columns. The Iline for the first transaction Is completed as an example. Income Statement Balance Sheet Total Total Transaction Equity Profit Assets Liabilities 1 Owner invests cash 2 Seli services for cash 3 Acquire services on credit 4 Pay wages with cash 5 Owner withdraws cash 6 Borrow cash with note payable 7 Sell services on credit 8 Buy office equipment for cash 9 Collect receivable from (7) 10 Buy asset with note payablearrow_forwardAttached is Apple Inc.'s financial information. Please answer questions 1-3. 1. Apple's earnings per share in 2021 is ___a. 2.74 b. 4.28 c. 3.42 d. 5.80 2. Apple's price-to-earnings ratio on 12/31/2021 is ____a. 49.29 b. 15.46 c. 23. 28 d. 30.61 3. Apple's working capital turnover in 2021 is___a. 17.27 b. 19.18 c. 14.82 d. 15.35arrow_forward
- Required: Compute the following: (For Requirements 1 to 4, enter your percentage answers rounded to 2 decimal places (i.e., 0.1234 should be entered as 12.34).) 1. Gross margin percentage. 2. Net profit margin percentage. 3. Return on total assets. 4. Return on equity. 5. Was financial leverage positive or negative for the year? 1. Gross margin percentage % 2. Net profit margin percentage % 3. Return on total assets % 4. Return on equity % 5. Financial Leveragearrow_forwardCalculate Ebanks, Inc.'s margin and net income. h. Çalculate Ebanks, Inc.'s return on а. equity.arrow_forward1. Complete the two final columns shown beside each item in Tiger Audio’s comparative financial statements. 2-a. Which account increased by the largest dollar amount? 2-b. Which account increased by the largest percentage?arrow_forward
- VII. Direction: Compute and interpret. The following comparative financial statements are provided by Avatar Industries. You were asked to compute the different financial ratios and provide your interpretations with regards to profitability, efficiency, liquidity and solvency of the company. Use the Answer Sheet template below to input your answer and solution. AVATAR INDUSTRIES AVATAR INDUSTRIES Comparative Statement of Financial Position For the years 2019 and 2018 Comparative Income Statement For the years 2019 and 2018 2019 2018 2019 2018 ASSETS Current Assets: Sales P200,000 P210,000 Cash & Cash Equivalent P65,000 P70,000 Sales Returns and Allowances 40,000 25,000 Accounts Receivable 40,000 35,000 Net Sales 160,000 185,000 Marketable Secuities 40,000 35,000 Cost of Goods Sold 100,000 115,625 Inventory 100,000 80,000 Gross Profit 60,000 69,375 Total Current Assets 220,000 200,000 160,000 P445,000 P380,000 245,000 Operating Expenses: Fixed Assets Selling Expenses 22,000 25,000 Total…arrow_forwardVII. Direction: Compute and interpret. The following comparative financial statements are provided by Avatar Industries. You were asked to compute the different financial ratios and provide your interpretations with regards to profitability, efficiency, liquidity and solvency of the company. Use the Answer Sheet template below to input your answer and solution. AVATAR INDUSTRIES AVATAR INDUSTRIES Comparative Statement of Financial Position For the years 2019 and 2018 Comparative Income Statement For the years 2019 and 2018 2019 2018 2019 2018 ASSETS Current Assets: Sales P200,000 P210,000 Cash & Cash Equivalent P65,000 P70,000 Sales Returns and Allowances 40,000 25,000 Accounts Receivable 40,000 35,000 Net Sales 160,000 185,000 Marketable Securities 40,000 35,000 Cost of Goods Sold 100,000 115,625 Inventory 100,000 80,000 Gross Profit 60,000 69,375 Total Current Assets 245,000 220,000 Operating Expenses: Fixed Assets 200,000 160,000 Selling Expenses 22,000 25,000 Total Assets P445,000…arrow_forwardRequirements: a. Prepare horizontal analysis based on the above statements presented (for percent: round of your answers to 2 decimal places) Music Lover, Inc.xlsx b. Evaluate the company's financial position and results of operation using the comparative statement analysis i. Short-term solvency analysis ii. Long-term financial position analysis iii. Operating efficiency and profitability analysisarrow_forward
- Please if you can help with these 2, better skip pls Assume the following relationships for the Caulder Corp.: Sales/Total assets 1.5× Return on assets (ROA) 8.0% Return on equity (ROE) 15.0% Calculate Caulder's profit margin and debt-to-capital ratio assuming the firm uses only debt and common equity, so total assets equal total invested capital. Do not round intermediate calculations. Round your answers to two decimal places. Profit margin: % Debt-to-capital ratio: % 2. Thomson Trucking has $9 billion in assets, and its tax rate is 25%. Its basic earning power (BEP) ratio is 11%, and its return on assets (ROA) is 5.25%. What is its times-interest-earned (TIE) ratio? Round your answer to two decimal places.arrow_forwardCommon-size financial statements. Prepare common-size income statements for Walmart and Starbucks using the January 2015 and September 2014 information in the popup window: Which company is doing a better job of getting sales dollars to net income? Where is the one company having an advantage over the other company in turning revenue into net income? Complete the table below. (Round to two decimal places. Net income to three decimal places.) Abbreviated Income Statements ($ in Millions) Company Account Walmart, Inc. 1/31/2015 Starbucks 9/30/2014 Sales 491,920 % 16,801 % Cost of goods sold $ -370,530 % 7,272 % Selling, general, and administrative expenses $ -94,693 % $ -11,569 % EBIT $ 26,697 % $ -2,040 % Interest expense S -2,343 % $ -26 % Taxes $ -9,011 % 764 % Net income $ 15,343 % -1,302 % Which company is doing a better job of getting sales dollars to net income? (Select from the drop-down menus.) Walmart and Starbucks bring and cents of sales revenue to the bottom line,…arrow_forwardCalculate the basic earnings power. (Round your answer to 2 decimal places.) Basic earnings power Calculate the return on assets. (Round your answer to 2 decimal places.) Return on assets % Return on equity % Calculate the return on equity. (Round your answer to 2 decimal places.) % Calculate the dividend payout. (Round your answer to 2 decimal places.)arrow_forward
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