Managerial Accounts

Chapter 3

t3-12) Comprehensive Ratio

Calculations

(3"13)

Comprehensive Ratio Analysis

Analysis of Financial Statements

Total assets turnover: 1.5 Gross profit margin on sales: Total liabilities-to-assets ratio:

Quick ratio: 0.80 Days sales outstanding (based

lnventory turnover ratio: 3.75

(Sales - Cost of goods sold)/Sales = 40o/o

on 365-day year): 36.5 days

25Yo

Partial lncome

Sales

Cost of goods sold

Balance Sheet

Cash

Accounts receivable

Inventories

Fixed assets

Total assets

Cash

Receivables

Inventories

Total current assets

Net fi-xed assets

Total assets

Statement lnformation

$ 22s,000 1,575,000

1,125,000

$2,950,000

1,350,000

Accounts payable

Long-term debt

Common stock

Retained earnings

Total liabilities and equity

Accounts payable

Notes payable

Other current liabilities

Totai current liabilities

Long-term debt

Common equi$r

Total liabilities and equily

50,000

100,000

$1qgqgq

The Kretovich Company had a quick ratio of 1.4, a current ratio of 3.0, a days sales outstanding of 36.5 days (based on a 365-day year), total current assets of $810,000, and cash and marketable securities of $120,000. What were Kretovich's annual sales?

Data for Lozano Chip Company and its industry averages follow.

a. Calculate the indicated ratios for Lozano. b. Construct the extended Du Pont equation for bo& Lozano and the industry. c. Outline Lozano's strengths and weaknesses as revealed by your analysis.

Lozano Chip Cornpany: Baiance Sheet as of December 3!,2A73 (Thousands of Dollars)

$ 601,866 326,634

s25,000

$1,453,500

1,068,750

t,752,750

_q4?s,ggq

Lozano Chip Company: Income Statement for Year Ended December 37,2013 (fhousands of Dollars)

$4,27s,999

Sales

Cost of goods sold

Selling, general, and administrative expenses

Earnings before interest and taxes (EBIT)

Interest expense

Earnings before taxes (EIIT)

Federal and state income taxes (40%)

Net income

$ 7,s00,000 6,375,000

825,000

$ 300,000 11 1,631

$ 188,359 75,348

9__tL3,022