Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Analysis of financial statement using ratio analysis.
Cross-sectional ratio analysis
Use the financial statements below and on page 84 for Fox Manufacturing Company for the year ended December 31, 2006, along with the industry average ratios also given in what follows, to:
a. Prepare and interpret a complete ratio analysis of the firm's 2006 operations. b. Summarize your findings and make recommendations.
Note: INTERMEDIATE
Fox Manufacturing Company
Income Statement for the Year Ended December 31, 2006
Sales revenue
$600,000
Less: Cost of goods sold
460,000
Gross profits
$140,000
Less: Operating expenses
General and administrative expenses
$30,000
Depreciation expense
30,000
Total operating expense
60,000
Operating profits
$80,000
Less: Interest expense
10,000
Net profits before taxes
$70,000
Less: Taxes
27,100
Net profits after taxes (earnings available for common stockholders)
$42,900
Earnings per share (EPS)
$2.15
Balance Sheet December 31, 2006
Assets
Cash
$15,000
Marketable securities
7,200
Accounts receivable
34,100
Inventories
82,000
Total current assets
$138,300
Net fixed assets
270,000
Total assets
$408,300
Liabilities and Stockholders' Equity
Accounts payable
$57,000
Notes payable
13,000
Accruals
5,000
Total current liabilities
$75,000
Long-term debt
$150,000
Stockholders' equity
Common stock equity (20,000 shares outstanding)
$110,200
Retained earnings
73,100
Total stockholders' equity
$183,300
Total liabilities and stockholders' equity
Ratio
Industry average, 2006
Current ratio
2.35
Quick ratio
0.87
Inventory turnovera
4.55
Average collection perioda
35.8 days
Total asset turnover
1.09
Debt ratio
0.300
Times interest earned ratio
12.3
Gross profit margin
0.202
Operating profit margin
0.135
Net profit margin
0.091
Return on total assets (ROA)
0.099
Return on common equity (ROE)
0.167
$3.10
Based on a 365-day year and on end-of-year figures.
Financial Statement Analysis and Preparation
Describe the ways that a person can become a shareholder of a company. Why Wal-Mart would split its stock?
An understanding of financial and accounting principles can be a valuable tool for managers. While not all managers will find themselves calculating financial ratios or preparing annual financial data.
Prepare a Statement of Cash Flow using the Direct Method and Prepare the Operations section of the Statement of Cash Flow using the Indirect Method.
This assignment has one case study and two question apart from case study. Questions related to document Liquidation question and Company financial statements question - Torquay Limited
Prepare general journal entries for Goela Ltd
Prepare the journal entry to record the acquisition of the assets.
Prepare general journal entries to record the transactions, assuming use of the periodic inventory system
Compare the view espoused by the economist Milton Friedman about the social responsibilities of business with the views express by Stigler.
Explain the IASB Conceptual Framework's perspective of users and their decisions.
T he focus of the report is to determine the extent to which you are comfortable relying on the financial statements as presented by management .
Computation of Free Cash Flow
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd