Details of this Paper

Exercise 17-12 Profitability analysis L.O. P3 Sanderson Company?s year-end

Description

solution


Question

Question;Exercise 17-12 Profitability analysis L.O. P3Sanderson Company?s year-end balance sheets follow.At December 31 2012 2011 2010Assets 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 bymortgages 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 2011Sales $ 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 equity2012 11 %(2) Price-earnings ratio on December 31. (Round your answers to 1 decimal place.)Price-earnings ratio2012 2011 (3) Dividend yield. (Round your answers to 1 decimal place. Omit the "%" sign in your response.)Dividend Yield2012 11 %Problem 17-4A Calculation of financial statement ratios L.O. P3Selected 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 CORPORATIONIncome StatementFor Year Ended December 31, 2011Sales $ 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 CORPORATIONBalance SheetDecember 31, 2011Assets 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 % Additional Requirements

 

Paper#40991 | Written in 18-Jul-2015

Price : $27
SiteLock