Question

The financial statements for Armstrong and Blair companies are summarized here Armstrong Company Blair Company Balance Sheet Cash Accounts Receivable, Net Inventory Equipment, Net Other Assets $ 42,000 29,000 37,000 54,000 314,000 415,000 47,000 114,000 194,000 52,000 Total Assets $449,000 $849,000 Current Liabilities Note Payable (long-term) $114,000 64,000 384,000 74,000 Total Liabilities Common Stock (par $10) Additional Paid-in Capital Retained Earnings 188,000 157,000 37,000 67,000 448,000 207,000 117,000 77,000 Total Liabilities and Stockholders Equity $449,000 $849,000 Income Statement Sales Revenue Cost of Goods Sold Other Expenses $471,000 $831,000 412,000 322,000 252,000 167,000 Net Income $ 52,000$ 97,000 Other Data Estimated value of each share at end of year Selected Data from Previous Year Accounts Receivable, Net Inventory Equipment, Net Note Payable (long-term) Total Stockholders Equity $19$26 $ 27,000 99,000 194,000 74,000 238,000 $ 45,000 52,000 314,000 77,000 447,000The companies are in the same line of business and are direct competitors in a large metropolitan area Both have been in business approximately 10 years and each has had steady growth. Despite these similarities, the management of each has a different viewpoint in many respects. Blair is more conservative, and as its president said, We avoid what we consider to be undue risk. Both companies use straight-line depreciation, but Blair estimates slightly shorter useful lives than Armstrong. No shares were issued in the current year and neither company is publicly held. Blair Company has an annual audit by a CPA, but Armstrong Company does not. Assume the end-of-year total assets and net equipment balances approximate the years average and all sales are on account. Required: 1. Calculate the following ratios TIP: To calculate EPS, use the balance in Common Stock to determine the number of shares outstanding. Common Stock equals the par value per share times the number of shares. (Use 365 days in a year. Round your intermediate calculations and your final answers to 2 decimal places.) Armstrong Company Blair Company Ratio Tests of Profitability 1. Net Profit Margin 2. Gross Profit Percentage 3. Fixed Asset Turnover 4. Return on Equity 5. Earnings per Share 6.Price/Earnings Ratio 0 0 0 Tests of Liquidity /. TReceivables Turnover Days to Collect 8. Inventory Turnover Days to Sell 9.Current Ratio Tests of Solvency: 10. Debt-to-AssetsThe companies are in the same line of business and are direct competitors in a large metropolitan area. Both have been in business approximately 10 years and each has had steady growth. Despite these similarities, the management of each has a different viewpoint in many respects. Blair is more conservative, and as its president said, “We avoid what we consider to be undue risk.” Both companies use straight-line depreciation, but Blair estimates slightly shorter useful lives than Armstrong. No shares were issued in the current year and neither company is publicly held. Blair Company has an annual audit by a CPA, but Armstrong Company does not. Assume the end-of-year total assets and net equipment balances approximate the year’s average and all sales are on account. Required: 1. Calculate the following ratios. TIP: To calculate EPS, use the balance in Common Stock to determine the number of shares outstanding. Common Stock equals the par value per share times the number of shares. (Use 365 days in a year. Round your intermediate calculations and your final answers to 2 decimal places.)

0 0
Add a comment Improve this question Transcribed image text
Know the answer?
Add Answer to:
The companies are in the same line of business and are direct competitors in a large...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • THE FIRST COMPANY IS ARMSTRONG COMPANY AND THE SECOND IS BLAIR COMPANY Company Company Balance Sheet...

    THE FIRST COMPANY IS ARMSTRONG COMPANY AND THE SECOND IS BLAIR COMPANY Company Company Balance Sheet $ 43,000 48.000 116,000 196,000 53,000 $ 456,000 $116,000 76.000 192,000 158.000 38,000 68,000 $456,000 $30,000 38.000 56,000 316,000 616,000 $856,000 $ 66,000 386,000 452,000 200.000 118,000 78.000 $856,000 Recounts Receivable, Net Inventory Equipment, Net Other last Total Assets Current Liabilities Note Payable (long-ter) Total Liabilities Common Stock (par $10) Additional Paid-in Capital Retained Earnings Total Liabilities and stockholders' Equity Income statement Sales Revenue...

  • Thor Company Gunnar Company Balance Sheet Cash $ 36,000 $ 33,000 Accounts Receivable, Net 78,000 29,000...

    Thor Company Gunnar Company Balance Sheet Cash $ 36,000 $ 33,000 Accounts Receivable, Net 78,000 29,000 Inventory 156,000 32,000 Equipment, Net 772,000 194,000 Other Assets 197,000 69,400 Total Assets $ 1,239,000 $ 357,400 Current Liabilities $ 170,000 $ 20,000 Note Payable (long-term) (12% interest rate) 268,000 68,000 Common Stock (par $20) 673,000 253,000 Additional Paid-in Capital 71,000 5,800 Retained Earnings 57,000 10,600 Total Liabilities and Stockholders’ Equity $ 1,239,000 $ 357,400 Income Statement Sales Revenue $ 1,123,000 $ 339,000 Cost...

  • The financial statements for Royale and Cavalier companies are summarlzed here: Royale Company Cavalier Сompany Balance...

    The financial statements for Royale and Cavalier companies are summarlzed here: Royale Company Cavalier Сompany Balance Sheet Cash $20,000 50,000 100,000 63,000 11,000 Accounts Receivable, Net Inventory Equipment, Net 15,000 150,000 540,000 135,000 Other Assets 41,000 Total Assets $845,000 $280,000 Current Liabilities $110,000 180,000 $15,000 45,000 205,000 6,000 9,000 Note Payable long-term) Common Stock (par $20) Additional Paid-In Capital Retained Earnings 475,000 45,000 35,000 Total Liabilities and Stockholders Equity $845,000 $280,000 Income Statement Sales Revenue $785,000 475,000 235,000 $265,000 145,000...

  • The financial statements for Royale and Cavalier companies are summarized here: Royale Company Cavalier Company Balance...

    The financial statements for Royale and Cavalier companies are summarized here: Royale Company Cavalier Company Balance Sheet Cash $ 17,000 $ 80,000 Accounts Receivable, Net 47,000 8,000 Inventory 94,000 9,000 Equipment, Net 534,000 144,000 Other Assets 132,000 38,000 Total Assets $ 824,000 $ 279,000 Current Liabilities $ 104,000 $ 21,000 Note Payable (long-term) 174,000 39,000 Common Stock (par $20) 472,000 202,000 Additional Paid-In Capital 42,000 9,000 Retained Earnings 32,000 8,000 Total Liabilities and Stockholders’ Equity $ 824,000 $ 279,000 Income...

  • Summary information from the financial statements of two companies competing in the same industry follows.   ...

    Summary information from the financial statements of two companies competing in the same industry follows.    Barco Company Kyan Company Barco Company Kyan Company Data from the current year-end balance sheets Data from the current year’s income statement Assets Sales $ 770,000 $ 880,200 Cash $ 19,500 $ 34,000 Cost of goods sold 585,100 632,500 Accounts receivable, net 46,500 64,600 Interest expense 7,900 13,000 Merchandise inventory 84,440 132,500 Income tax expense 14,800 24,300 Prepaid expenses 5,000 6,950 Net income 162,200...

  • Summary information from the financial statements of two companies competing in the same industry follows.   ...

    Summary information from the financial statements of two companies competing in the same industry follows.    Barco Company Kyan Company Barco Company Kyan Company Data from the current year-end balance sheets Data from the current year’s income statement Assets Sales $ 770,000 $ 880,200 Cash $ 19,500 $ 34,000 Cost of goods sold 585,100 632,500 Accounts receivable, net 46,500 64,600 Interest expense 7,900 13,000 Merchandise inventory 84,440 132,500 Income tax expense 14,800 24,300 Prepaid expenses 5,000 6,950 Net income 162,200...

  • Summary information from the financial statements of two companies competing in the same industry follows. Barco...

    Summary information from the financial statements of two companies competing in the same industry follows. Barco Kyan Company Company Data from the current year and balance sheets Assets Cash $ 21,000 $31.000 Accounts receivable, et 37.400 54,400 Current notes receivable (trade) 9,800 3.200 Merchandise inventory 84,840 134,500 Prepaid expenses 6,200 2,850 Plant annets, net 290,000 306,400 Total assets $449,240 $542,350 Barco Kyan Company Coepany Data from the current year's income statement Sales $800,000 $920,200 cost of goods sold 587,100 634.500...

  • Chapter 13 Homework (Algo) 0 The financial statements for Royale and Cavalier companies are summarized here:...

    Chapter 13 Homework (Algo) 0 The financial statements for Royale and Cavalier companies are summarized here: Royale Company Cavalier Company Dont ebook Balance Sheet Cash Accounts Receivable, Net Inventory Equipment, Net Other Assets Total Assets Current Liabilities Note Payable long-tera) Common Stock (par 520) Additional Paiden Capital Retained Tarnings Total Liabilities and Stockholders' Equity Income Statement Sales avenue Cost of Goods sold Other Expenses Net Income Other Data Por ahore price at end of year Selected Data from previous Year...

  • Summary information from the financial statements of two companies competing in the same industry follows. Problem...

    Summary information from the financial statements of two companies competing in the same industry follows. Problem 13-5A Comparative ratio analysis A1P3 T Barco Company Kyan Company Barco Сотрату Kyan Сотрату Sales Data from the current year-end balance sheets Assets Cash ... $19,500 Accounts receivable, net 37.400 Current notes receivable (trade).... 9.100 Merchandise inventory.......... 84.440 Prepaid expenses 5.000 Plant assets, net... 290,000 Total assets.. $445,440 $ 34,000 57.400 7.200 132.500 6.950 304,400 $542.450 Data from the current year's income statement $770,000...

  • Summary information from the financial statements of two companies competing in the same industry follows. Cash...

    Summary information from the financial statements of two companies competing in the same industry follows. Cash Barco Kyan Barco Kyan Company Company Company Company Data from the current year end balance sheets Data from the current year's income statesent $770,000 $880, 200 $ 19,500 $ 34,000 Cost of goods sold 585,100 532.500 Accounts receivable. net 37.400 57.400 Interest expense 7,900 13.000 Current notes receivable (trade) 9, 100 7,200 Income tax expense 14,800 24.300 Merchandise inventory 34,449 132.500 Net Income 162,200...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT