Homework Answers
A. Interest Coverage Ratio
For a particular year,
Interest Coverage Ratio = EBIT / Interest Expenses
Year 1 EBIT = 1,297 (given), Year 1 Interest Expense = 120 (given)
Thus Year 1 ICR = 1,297/120 = 10.81
For Year 2,
Sales = 3,018, COGS = 1,500, Depreciation = Accumulated Depreciation for Year 2 - Accumulated Depreciation for Year 1 = 6,758 - 6,642 - 116
Thus EBIT = Sales - COGS - Accumulated Depreciation = 3018 - 1500 - 116 = 1,402
Interest Expense = 140
Thus Year 2 ICR = 1,402/140 = 10.01
B. Average Collection Period (ACP)
For Year 1,
Cash Received = Sales - Accounts Receivable = 2,700 - 840 = 1,860
Credit Sales = Sales - (Increase in Receivables - Decrease in Payables)
Assuming Decrease in Payables to be zero (as no information provided), we have,
Credit Sales = 1,860 - (950 - 840) = 1,750
Average accounts receivable = (950 + 840)/2 = 895
Average Receivables Turnover Ratio = Credit Sales / Average accounts receivable = 1,750/895 = 1.955
ACP = 365 / Average Receivables Turnover Ratio = 186.67 ~ 187 days
For Year 2,
Credit Sales = Cash Received - Receivables at the start of the period + Receivables at the end of the period = 236 - 840 + 1,292 = 688
Average accounts receivable = (840 + 1,292)/2 = 1,066
Average Receivables Turnover Ratio = Credit Sales / Average accounts receivable = 688/1,066 = 0.645
ACP = 365 / Average Receivables Turnover Ratio = 565.54 ~ 566 days
C. Current Ratio
For Year 1,
Current Assets = Accounts Receivable + Inventory + Cash & Equivalents = 840 + 1,036 + 138 = 2,014
Current Liabilities = Accounts Payable + Other Current Liabilities = 394 + 96 = 490
Thus, Current Ratio = Current Assets / Current Liabilities = 2,014/490 = 4.11
For Year 2,
Current Assets = Accounts Receivable + Inventory + Cash & Equivalents = 1,292 + 1,026 + 236 = 2,554
Current Liabilities = Accounts Payable + Other Current Liabilities = 448 + 116 = 564
Thus, Current Ratio = Current Assets / Current Liabilities = 2,554/564 = 4.53
D. Quick Ratio
For Year 1,
Quick Ratio = (Current Assets - Inventory) / Current Liabilities = (2,014 - 1,036)/490 = 2
For Year 2,
Quick Ratio = (Current Assets - Inventory) / Current Liabilities = (2,554 - 1,026)/564 = 2.71
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Windswept Woodworks, Inc. Input Data (millions of dollars) 448 1,292 Accounts receivable 6,642 Cash & equivalents...
Use the information in the table below to calculate the following ratios for Windswept Woodworks for...
Use the information in the table below to calculate the following ratios for Windswept Woodworks for year 1 and year 2. (Round your answers to 2 decimal places.) Windswept Woodworks, Inc. Input Data (millions of dollars) Year 2 Accounts payable 472 Accounts receivable 1,316 Accumulated depreciation 6,782 Cash & equivalents 260 Common stock 1,220 Cost of goods sold 1,500 Depreciation expense Common stock dividends paid ? Interest expense 140 Inventory 1,050 Addition to retained earnings 602 Long-term debt 848 Notes...
Check my work U HUU MIU MIU your Wind wept Woodworks, Inc. Input Data (millions of...
Check my work U HUU MIU MIU your Wind wept Woodworks, Inc. Input Data (millions of dollars) Year 2 Accounts payable 472 Accounts receivable 1,316 Accumulated depreciation 6,782 Canh & equivalents 260 Common stock 1,220 Coat of goods sold 1,500 Depreciation expense 2 Common stock dividends paid 2 Interest expense 140 Inventory 1,050 Addition to retained earnings 602 Long-term debt 848 Notes payable 230 Gross plant & equipment 10,260 Retained earnings 3,098 Sales 3,018 Other current liabilities 116 Tax rate...
Use the information below to prepare a statement of cash flows for Windswept Woodworks, Inc. for...
Use the information below to prepare a statement of cash flows for Windswept Woodworks, Inc. for year 2. Net income is given. (Use a minus sign to indicate negative values. Round each entry to 2 decimal places.) Windswept Woodworks, Inc. Input Data (millions of dollars) Year 2 Accounts payable 436 Accounts receivable 1,280 Accumulated depreciation 6, 746 Cash & equivalents 224 Common stock 1, 184 Cost of goods sold 1,500 Depreciation expense 2 Common stock dividends paid 2 Interest expense...
Use the information below to prepare a statement of cash flows for Windswept Woodworks, Inc. for...
Use the information below to prepare a statement of cash flows for Windswept Woodworks, Inc. for year 2. Net income is given. (Use a minus sign to indicate negative values. Round each entry to 2 decimal places.) Windswept Woodworks, Inc. Input Data (millions of dollars) Year 2 Accounts payable 436 Accounts receivable 1,280 Accumulated depreciation 6,746 Cash & equivalents 224 Common stock 1,184 Cost of goods sold 1,500 Depreciation expense 7 Common stock dividends paid 7 Interest expense 140 Inventory...
Year 2 472 1,316 6,782 260 1,220 1,500 Year 1 414 860 6,662 158 Accounts payable Accounts receivable Accumulated de...
Year 2 472 1,316 6,782 260 1,220 1,500 Year 1 414 860 6,662 158 Accounts payable Accounts receivable Accumulated depreciation Cash & equivalents Common stock Cost of goods sold Depreciation expense Common stock dividends paid Interest expense Inventory Addition to retained earnings Long-term debt Notes payable Gross plant & equipment Retained earnings Sales Other current liabilities Tax rate Market price per share - year end Number of shares outstanding 140 1,050 602 848 230 10,260 3,098 3,018 116 346 $...
Use the information in the table below to answer the following questions. Year 1 414 860...
Use the information in the table below to answer the following questions. Year 1 414 860 6,662 158 1,150 Windswept Woodworks, Inc. Input Data (millions of dollars) Year 2 Accounts payable 472 Accounts receivable 1,316 Accumulated depreciation 6,782 Cash & equivalents 260 Common stock 1,220 Cost of goods sold 1,500 Depreciation expense 2 Common stock dividende paid 2 Interest expense 140 Inventory 1.050 Addition to retained earnings 602 Long-term debt 848 Notes payable 230 Gross plant & equipment 10,260 Retained...
End of Year Beginning of Year Cash and cash equivalents $ 770 $ 79 Accounts receivable...
End of Year Beginning of Year Cash and cash equivalents $ 770 $ 79 Accounts receivable (net) 1,930 1,830 Inventory 850 840 Other current assets 750 501 Total current assets $4,300 $3,250 Total current liabilities $1,990 $1,630 For the year, net credit sales were $8,258 million, cost of goods sold was $5,328 million, and net cash provided by operating activities was $1,251 million Compute the current ratio, accounts receivable turnover, average collection period, Inventory turnover and days in Inventory at...
Barco Company Data from the current year-end balance sheets Kyan Company kyan Company Cash Accounts receivable,...
Barco Company Data from the current year-end balance sheets Kyan Company kyan Company Cash Accounts receivable, net Current notes receivable (trade) Merchandise Inventory Prepaid expenses Plant assets, net Total assets $ 21,000 $31.000 37,400 54,40 9,800 54,840 134,500 6,200 1,050 290.000 100.400 9443,2405542,350 Barco Company Data from the current year's Income statement Sales 600,000 Cost of goods sold 507,100 Interest expense ,300 Income tax expense 15,373 Net Income 139,223 Basic earnings per share Cash dividends per share 3.50 $920,200 63450...
Castile Products, Inc. Balance Sheet December 31 Assets Current assets: Cash Accounts receivable, net Merchandise inventory...
Castile Products, Inc. Balance Sheet December 31 Assets Current assets: Cash Accounts receivable, net Merchandise inventory Prepaid expenses Total current assets Property and equipment, net Total assets Liabilities and Stockholders' Equity Liabilities: Current liabilities Bonds payable, 10% Total liabilities Stockholders' equity: Common stock, $5 per value Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $ 6,500 35,000 70,000 3,500 115,000 185,000 $300,000 $ 50,000 80,000 130,000 30,000 140,000 170,000 $300,000 Castile Products, Inc. Income Statement For the Year...
Current Yr 1 Yr Ago 2 Yrs Ago At December 31 Assets Cash Accounts receivable, net...
Current Yr 1 Yr Ago 2 Yrs Ago At December 31 Assets Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets Liabilities and Equity Accounts payable Long-term notes payable secured by mortgages on plant assets Common stock, $10 par value Retained earnings Total liabilities and equity $ 31,953 89,200 110,500 10,290 310.679 $552,622 $ 37,350 $ 39, 303 62,900 51.900 84,000 55,000 9.804 4.367 282,344 254,530 $ 476,398 $ 405,100 $134,851 $ 78,901 $ 52,404 101,815...
Use the information in the table below to calculate the following ratios for Windswept Woodworks for year 1 and year 2. (Round your answers to 2 decimal places.) Windswept Woodworks, Inc. Input Data (millions of dollars) Year 2 Accounts payable 472 Accounts receivable 1,316 Accumulated depreciation 6,782 Cash & equivalents 260 Common stock 1,220 Cost of goods sold 1,500 Depreciation expense Common stock dividends paid ? Interest expense 140 Inventory 1,050 Addition to retained earnings 602 Long-term debt 848 Notes...
Check my work U HUU MIU MIU your Wind wept Woodworks, Inc. Input Data (millions of dollars) Year 2 Accounts payable 472 Accounts receivable 1,316 Accumulated depreciation 6,782 Canh & equivalents 260 Common stock 1,220 Coat of goods sold 1,500 Depreciation expense 2 Common stock dividends paid 2 Interest expense 140 Inventory 1,050 Addition to retained earnings 602 Long-term debt 848 Notes payable 230 Gross plant & equipment 10,260 Retained earnings 3,098 Sales 3,018 Other current liabilities 116 Tax rate...
Use the information below to prepare a statement of cash flows for Windswept Woodworks, Inc. for year 2. Net income is given. (Use a minus sign to indicate negative values. Round each entry to 2 decimal places.) Windswept Woodworks, Inc. Input Data (millions of dollars) Year 2 Accounts payable 436 Accounts receivable 1,280 Accumulated depreciation 6, 746 Cash & equivalents 224 Common stock 1, 184 Cost of goods sold 1,500 Depreciation expense 2 Common stock dividends paid 2 Interest expense...
Use the information below to prepare a statement of cash flows for Windswept Woodworks, Inc. for year 2. Net income is given. (Use a minus sign to indicate negative values. Round each entry to 2 decimal places.) Windswept Woodworks, Inc. Input Data (millions of dollars) Year 2 Accounts payable 436 Accounts receivable 1,280 Accumulated depreciation 6,746 Cash & equivalents 224 Common stock 1,184 Cost of goods sold 1,500 Depreciation expense 7 Common stock dividends paid 7 Interest expense 140 Inventory...
Year 2 472 1,316 6,782 260 1,220 1,500 Year 1 414 860 6,662 158 Accounts payable Accounts receivable Accumulated depreciation Cash & equivalents Common stock Cost of goods sold Depreciation expense Common stock dividends paid Interest expense Inventory Addition to retained earnings Long-term debt Notes payable Gross plant & equipment Retained earnings Sales Other current liabilities Tax rate Market price per share - year end Number of shares outstanding 140 1,050 602 848 230 10,260 3,098 3,018 116 346 $...
Use the information in the table below to answer the following questions. Year 1 414 860 6,662 158 1,150 Windswept Woodworks, Inc. Input Data (millions of dollars) Year 2 Accounts payable 472 Accounts receivable 1,316 Accumulated depreciation 6,782 Cash & equivalents 260 Common stock 1,220 Cost of goods sold 1,500 Depreciation expense 2 Common stock dividende paid 2 Interest expense 140 Inventory 1.050 Addition to retained earnings 602 Long-term debt 848 Notes payable 230 Gross plant & equipment 10,260 Retained...
End of Year Beginning of Year Cash and cash equivalents $ 770 $ 79 Accounts receivable (net) 1,930 1,830 Inventory 850 840 Other current assets 750 501 Total current assets $4,300 $3,250 Total current liabilities $1,990 $1,630 For the year, net credit sales were $8,258 million, cost of goods sold was $5,328 million, and net cash provided by operating activities was $1,251 million Compute the current ratio, accounts receivable turnover, average collection period, Inventory turnover and days in Inventory at...
Barco Company Data from the current year-end balance sheets Kyan Company kyan Company Cash Accounts receivable, net Current notes receivable (trade) Merchandise Inventory Prepaid expenses Plant assets, net Total assets $ 21,000 $31.000 37,400 54,40 9,800 54,840 134,500 6,200 1,050 290.000 100.400 9443,2405542,350 Barco Company Data from the current year's Income statement Sales 600,000 Cost of goods sold 507,100 Interest expense ,300 Income tax expense 15,373 Net Income 139,223 Basic earnings per share Cash dividends per share 3.50 $920,200 63450...
Castile Products, Inc. Balance Sheet December 31 Assets Current assets: Cash Accounts receivable, net Merchandise inventory Prepaid expenses Total current assets Property and equipment, net Total assets Liabilities and Stockholders' Equity Liabilities: Current liabilities Bonds payable, 10% Total liabilities Stockholders' equity: Common stock, $5 per value Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $ 6,500 35,000 70,000 3,500 115,000 185,000 $300,000 $ 50,000 80,000 130,000 30,000 140,000 170,000 $300,000 Castile Products, Inc. Income Statement For the Year...
Current Yr 1 Yr Ago 2 Yrs Ago At December 31 Assets Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets Liabilities and Equity Accounts payable Long-term notes payable secured by mortgages on plant assets Common stock, $10 par value Retained earnings Total liabilities and equity $ 31,953 89,200 110,500 10,290 310.679 $552,622 $ 37,350 $ 39, 303 62,900 51.900 84,000 55,000 9.804 4.367 282,344 254,530 $ 476,398 $ 405,100 $134,851 $ 78,901 $ 52,404 101,815...
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