WEEK 2 FOR THE ULTIMATE PROFESSOR ONLY
mkiche
document10.docx1. Balance Sheet -------- From the following balance sheet accounts,
· a.construct a balance sheet for 2013 and 2014.
· b.list all the working capital accounts.
· c.find the net working capital for the years ending 2013 and 2014.
· d.calculate the change in net working capital for the year 2014.
|
Balance Sheet Accounts of Roman Corporation |
|
|
|
Account |
Balance 12/31/2013 |
Balance 12/31/2014 |
|
Accumulated depreciation |
$2,020 |
$2,670 |
|
Accounts payable |
$1,800 |
$2,060 |
|
Accounts receivable |
$2,480 |
$2,690 |
|
Cash |
$1,300 |
$1,090 |
|
Common stock |
$4,990 |
$4,990 |
|
Inventory |
$5,800 |
$6,030 |
|
Long-term debt |
$7,800 |
$8,200 |
|
Plant, property, and equipment |
$8,400 |
$9,200 |
|
Retained earnings |
$1,370 |
$1,090 |
Research two companies' financial statements from the following industries:
· Airline
· Oil/gas
Analyze table 14.8 in Financial Management: Core Concepts, Ch. 14: "Financial Ratios: Industry Averages." (Table is below)
Prepare the following ratios for the two sets of financial statements in Microsoft® Excel®:
· Price to Earnings
· Gross Margin
Table 14.8 Financial Ratios: Industry Averages
|
Ratio or Account |
Airlines |
Auto |
Pharmaceuticals |
Oil and Gas |
Retail |
Computer Hardware |
|
P/E ratio |
22.44 |
7.38 |
87.80 |
5.39 |
34.29 |
20.97 |
|
Gross margin |
19.28% |
21.77% |
59.54% |
47.47% |
24.51% |
43.54% |
|
Profit margin |
0.75% |
3.79% |
14.85% |
12.14% |
2.94% |
17.08% |
|
Current ratio |
0.92 |
0.32 |
2.77 |
1.11 |
1.23 |
2.86 |
|
Debt-to-equity ratio |
1.69 |
0.34 |
0.11 |
0.19 |
0.81 |
0.19 |
|
Return on assets |
0.70% |
3.57% |
9.40% |
12.11% |
6.31% |
18.22% |
|
Return on equity |
0.77% |
10.17% |
14.71% |
20.10% |
16.82% |
26.24%
|
