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RATIO ANALYSIS illustration 2 to 9




Question;RATIO;ANALYSIS;Ratio analysisexpresses the;relationship among selected items of financial statement data. A ratioexpresses the mathematical relationship;between one quantity and another. For analysis of the primary financial;statements, we classify ratios as follows.;Illustration 2-9;Financial ratio;classifications;A single ratio by itself is not very meaningful.;Accordingly, in this and the following chapters, we will use various;comparisons to shed light on company performance;1.;Intracompany comparisons covering two years for the same company.;2.;Industry-average comparisons based on average ratios for;particular industries.;3.;Intercompany comparisons based on comparisons with a;competitor in the same industry;Question 1;Using these data from;the comparative balance sheet of Rosalez Company, perform horizontal analysis.(If amount and percentage;are a decrease show the numbers as negative, e.g. -55,000, -20% or (55,000);(20%). Round percentages to 0 decimal places, e.g. 12%.);Increase;or (Decrease);Dec.;31, 2012;Dec.;31, 2011;Amount;Percentage;Accounts receivable;$ 545,500;$ 393,400;$;%;Inventory;$ 820,400;$ 604,600;$;%;Total assets;$3,146,500;$2,742,100;$;%;Question 2;Using these data from;the comparative balance sheet of Rosalez Company, perform vertical analysis.(Round percentages to 1;decimal place, e.g. 12.5%.);Dec.;31, 2012;Dec.;31, 2011;Amount;Percentage;Amount;Percentage;Accounts receivable;$ 543,900;%;$ 417,700;%;Inventory;$ 821,700;%;$ 617,000;%;Total assets;$3,175,700;%;$2,787,300;%;Question 3;Vertical analysis;(common-size) percentages for Vallejo Company?s sales, cost of goods sold, and;expenses are listed here.;Vertical;Analysis;2012;2011;2010;Sales;100;%;100;%;100;%;Cost of goods sold;60.8;63.8;66.4;Expenses;24.7;27.8;28.8;Did Vallejo?s net income as a percent of sales increase, decrease, or remain;unchanged over the 3-year period? Provide numerical support for your answer.;Question 4;Horizontal;analysis (trend analysis) percentages for Spartan Company?s sales, cost of;goods sold, and expenses are listed here.;Horizontal;Analysis;2012;2011;2010;Sales;96.2;%;104.8;%;100.0;%;Cost of goods sold;101.0;98.0;100.0;Expenses;105.6;95.4;100.0;Explain whether Spartan?s net income increased, decreased, or remained;unchanged over the 3-year period.;Question 5;These selected condensed data are taken from recent balance;sheets ofBob Evans Farms(in thousands).;2009;2008;Cash;$ 13,606;$ 7,669;Accounts;receivable;23,045;19,951;Inventories;31,087;31,345;Other current;assets;12,522;11,909;Total current;assets;$ 80,260;$ 70,874;Total current;liabilities;$245,805;$326,203;(a);Compute the current ratio for each year.(Round answers to 2 decimal places, e.g..12: 1.);2009;2008;Current ratio;1;1;Question 6;Staples, one of the largest;suppliers of office products in the United States. It had net income of $738.7;million and sales of $24,275.5 million in 2009. Its total assets were $13,073.1;million at the beginning of the year and $13,717.3 million at the end of the;year. What is Staples, Inc.?s asset turnover ratio and profit margin ratio?(Round answers to 2;decimal places, e.g. 1.25 or 2.05%.);Asset turnover ratio;times;Profit margin ratio;%;Question 7;Selected data taken from;a recent year?s financial statements of trading card companyTopps Company, Inc.are as follows (in;millions).;Net sales;$326.7;Current liabilities;beginning of year;41.1;Current liabilities;end of year;62.4;Net cash provided by;operating activities;10.4;Total liabilities;beginning of year;65.2;Total liabilities, end;of year;73.2;Capital expenditures;3.7;Cash dividends;6.2;Compute these ratios: current cash debt coverage ratio, cash debt coverage;ratio, and free cash flow. Provide a brief interpretation of your results.(Round answers to 2;decimal places, e.g. 0.12.);Current cash debt;coverage ratio;times;Cash debt coverage;ratio;times;Free Cash Flow;$;millions;="msonormal">


Paper#42841 | Written in 18-Jul-2015

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