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Exercise 17-12_Sanderson Company and Problem 17-4A_McCord Corporation_Ratio Analysis




Question;Exercise 17-12 Profitability analysis L.O. P3;Sanderson Company?s year-end balance;sheets follow.;At December 31 2012 2011 2010;Assets;Cash $ 30,501 $ 35,307 $ 36,403;Accounts receivable, net 86,685;59,970 47,595;Merchandise inventory 105,753 77,645 51,708;Prepaid expenses 9,727 8,905 3,888;Plant assets, net 269,247 250,857;217,406;Total assets $ 501,913 $ 432,684 $;357,000;Liabilities and Equity;Accounts payable $ 127,476 $ 74,586 $;47,124;Long-term notes payable secured by;mortgages on plant assets 94,360;98,522 79,686;Common stock, $10 par value 162,500;162,500 162,500;Retained earnings 117,577 97,076;67,690;Total liabilities and equity $;501,913 $ 432,684 $ 357,000;The company?s income statements for;the years ended December 31, 2012 and 2011, follow.;For Year Ended December 31 2012 2011;Sales $ 652,487 $ 514,894;Cost of goods sold $ 398,017 $;334,681;Other operating expenses 202,271;130,268;Interest expense 11,092 11,843;Income taxes 8,482 7,723;Total costs and expenses 619,862;484,515;Net income $ 32,625 $ 30,379;Earnings per share $ 2.01 $ 1.87;Additional information about the;company follows.;Common stock market price, December;31, 2012 $30.00;Common stock market price, December;31, 2011 28.00;Annual cash dividends per share in;2012 0.32;Annual cash dividends per share in;2011 0.16;To help evaluate the company's;profitability, compute the following ratios for 2012 and 2011;(1) Return on common stockholders;equity. (Do not round intermediate calculations and round your final answers to;1 decimal place. Omit the "%" sign in your response.);Return on common shareholders equity;2012 %;2011 %;(2) Price-earnings ratio on December;31. (Round your answers to 1 decimal place.);Price-earnings ratio;2012;2011;(3) Dividend yield. (Round your;answers to 1 decimal place. Omit the "%" sign in your response.);Dividend Yield;2012 %;2011 %;Problem 17-4A Calculation of;financial statement ratios L.O. P3;Selected year-end financial;statements of McCord Corporation follow. (All sales were on credit, selected;balance sheet amounts at December 31, 2010, were inventory, $50,900, total;assets, $259,400, common stock, $90,000, and retained earnings, $52,348.);McCORD CORPORATION;Income Statement;For Year Ended December 31, 2011;Sales $ 454,600;Cost of goods sold 297,450;Gross profit 157,150;Operating expenses 98,800;Interest expense 4,300;Income before taxes 54,050;Income taxes 21,774;Net income $ 32,276;McCORD CORPORATION;Balance Sheet;December 31, 2011;Assets Liabilities and Equity;Cash $;12,000 Accounts payable $ 23,500;Short-term investments 9,200 Accrued wages payable 4,000;Accounts receivable, net 30,000 Income taxes payable 3,700;Notes receivable (trade)* 5,500 Long-term note payable, secured;Merchandise inventory 34,150 by mortgage on plant assets 72,400;Prepaid expenses 2,500 Common stock 90,000;Plant assets, net 147,300 Retained earnings 47,050;Total assets $ 240,650 Total;liabilities and equity $ 240,650;* These are short-term notes;receivable arising from customer (trade) sales.;Required;Compute the following. (Use 365 days;a year. Do not round intermediate calculations and round your final answers to;1 decimal place. Omit the "%" sign in your response);(1) Current ratio to;(2) Acid-test ratio to;(3) Days' sales uncollected;(including note) days;(4) Inventory turnover times;(5) Days' sales in inventory days;(6) Debt-to-equity ratio to;(7) Times interest earned times;(8) Profit margin ratio %;(9) Total asset turnover times;(10) Return on total assets %;(11) Return on common stockholders;equity %


Paper#37388 | Written in 18-Jul-2015

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