ACC 560 HW 10
Exercise 14-4
Operating data for Joshua Corporation are presented below.
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2020 |
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2019 |
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Sales revenue |
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$746,000 |
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$595,000 |
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Cost of goods sold |
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467,742 |
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395,080 |
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Selling expenses |
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118,614 |
|
76,755 |
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Administrative expenses |
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60,426 |
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57,715 |
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Income tax expense |
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32,078 |
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24,990 |
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Net income |
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67,140 |
|
40,460 |
Prepare a schedule showing a vertical analysis for 2020 and 2019. (Round answers to 1 decimal place, e.g. 48.5%.)
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JOSHUA CORPORATION Condensed Income Statements For the Years Ended December 31 |
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2020 |
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2019 |
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Amount |
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Percent |
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Amount |
|
Percent |
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Sales revenue |
$746,000 |
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% |
|
$595,000 |
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% |
|
Cost of goods sold |
467,742 |
|
% |
|
395,080 |
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% |
|
Gross profit |
278,258 |
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% |
|
199,920 |
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% |
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Selling expenses |
118,614 |
|
% |
|
76,755 |
|
% |
|
Administrative expenses |
60,426 |
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% |
|
57,715 |
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% |
|
Total operating expenses |
179,040 |
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% |
|
134,470 |
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% |
|
Income before income taxes |
99,218 |
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% |
|
65,450 |
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% |
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Income taxes expense |
32,078 |
|
% |
|
24,990 |
|
% |
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Net income |
$67,140 |
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% |
|
$40,460 |
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% |
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|
Exercise 14-7
Nordstrom, Inc. operates department stores in numerous states. Suppose selected financial statement data (in millions) for 2020 are presented below.
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End of Year |
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Beginning of Year |
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Cash and cash equivalents |
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$ 1,017 |
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$ 94 |
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Accounts receivable (net) |
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2,600 |
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|
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2,500 |
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Inventory |
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1,200 |
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|
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1,200 |
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Other current assets |
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|
423 |
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|
|
394 |
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Total current assets |
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$5,240 |
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$4,188 |
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Total current liabilities |
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$2,620 |
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$2,081 |
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For the year, net credit sales were $10,710 million, cost of goods sold was $6,960 million, and net cash provided by operating activities was $1,272 million. Compute the current ratio, accounts receivable turnover, average collection period, inventory turnover, and days in inventory at the end of the current year. (Round answers to 1 decimal place, e.g. 1.6.)
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Current ratio |
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:1 |
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Accounts receivable turnover |
|
|
times |
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Average collection period |
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|
days |
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Inventory turnover |
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|
times |
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Days in inventory |
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|
days |
Exercise 14-11
Here is the income statement for Myers, Inc.
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Myers, Inc. Income Statement For the Year Ended December 31, 2020 |
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Sales revenue |
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$430,000 |
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Cost of goods sold |
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200,000 |
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Gross profit |
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230,000 |
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Expenses (including $10,000 interest and $23,000 income taxes) |
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96,000 |
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Net income |
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$ 134,000 |
Additional information:
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1. |
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Common stock outstanding January 1, 2020, was 16,000 shares, and 24,000 shares were outstanding at December 31, 2020. |
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2. |
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The market price of Myers stock was $11.43 in 2020. |
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3. |
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Cash dividends of $28,140 were paid, $7,000 of which were to preferred stockholders. |
Compute the following measures for 2020. (Round Earnings per share to 2 decimal places, e.g. 1.65, and all other answers to 1 decimal place, e.g. 6.8 or 6.8%.)
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(a) |
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Earnings per share |
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$
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(b) |
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Price-earnings ratio |
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|
times |
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(c) |
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Payout ratio |
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% |
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(d) |
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Times interest earned |
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|
times |
Problem 14-5A a
Suppose selected financial data of Target and Wal-Mart for 2020 are presented here (in millions).
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Target Corporation |
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Wal-Mart Stores, Inc. |
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Income Statement Data for Year |
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Net sales |
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$65,357 |
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$408,214 |
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Cost of goods sold |
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45,583 |
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304,657 |
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Selling and administrative expenses |
|
15,101 |
|
79,607 |
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Interest expense |
|
707 |
|
2,065 |
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Other income (expense) |
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(94) |
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(411) |
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Income tax expense |
|
1,384 |
|
7,139 |
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Net income |
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$ 2,488 |
|
$ 14,335 |
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|
|
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Balance Sheet Data (End of Year) |
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Current assets |
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$18,424 |
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$48,331 |
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Noncurrent assets |
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26,109 |
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122,375 |
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Total assets |
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$44,533 |
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$170,706 |
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Current liabilities |
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$11,327 |
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$55,561 |
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Long-term debt |
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17,859 |
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44,089 |
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Total stockholders’ equity |
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15,347 |
|
71,056 |
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Total liabilities and stockholders’ equity |
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$44,533 |
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$170,706 |
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|
|
|
|
|
|
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Beginning-of-Year Balances |
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Total assets |
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$44,106 |
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$163,429 |
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Total stockholders’ equity |
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13,712 |
|
65,682 |
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Current liabilities |
|
10,512 |
|
55,390 |
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Total liabilities |
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30,394 |
|
97,747 |
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|
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|
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Other Data |
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Average net accounts receivable |
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$7,525 |
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$4,025 |
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Average inventory |
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6,942 |
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33,836 |
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Net cash provided by operating activities |
|
5,881 |
|
26,249 |
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Capital expenditures |
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1,729 |
|
12,184 |
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Dividends |
|
496 |
|
4,217 |
(a) For each company, compute the following ratios. (Enter free cash flow in millions. Round Current ratio to 2 decimal places, e.g. 1.67. Round Debt to assets ratio to 0 decimal places, e.g. 18 or 18%. Round all other answers to 1 decimal place, e.g. 1.6, or 1.6%. Use 365 days for calculation.)
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Ratio |
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Target |
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Wal-Mart |
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(1) |
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Current ratio |
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|
:1 |
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|
:1 |
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(2) |
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Accounts receivable turnover |
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|
|
times |
|
|
|
times |
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(3) |
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Average collection period |
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|
|
days |
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|
|
days |
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(4) |
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Inventory turnover |
|
|
|
times |
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|
|
times |
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(5) |
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Days in inventory |
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|
|
days |
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|
|
days |
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(6) |
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Profit margin |
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% |
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% |
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(7) |
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Asset turnover |
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|
|
times |
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|
|
times |
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(8) |
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Return on assets |
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|
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% |
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% |
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(9) |
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Return on common stockholders’ equity |
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|
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% |
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|
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% |
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(10) |
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Debt to assets ratio |
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|
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% |
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|
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% |
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(11) |
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Times interest earned |
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|
|
times |
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|
|
times |
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(12) |
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Free cash flow |
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$
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million |
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$
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million |
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