Homework Answers
Question 1
Gross Profit Percentage = Gross Profit / Sales Revenue * 100
For Current Year
Gross Profit Percentage = 100,000 / 180,000 * 100
Gross Profit Percentage = 55.56%
For Previous Year
Gross Profit Percentage = 79,000 / 155,000 * 100
Gross Profit Percentage = 50.97%
The Current Year results are better than previous year as the gross profit percentage has increased in cureez year.
Question 2
Formula for Net Profit Margin = Net Income / Sales Revenue * 100
For Current Year
Net Profit Margin = 31,220 / 180,000 * 100
Net Profit Margin = 17.34%
For Previous Year
Net Profit Margin = 20,580 / 155,000 * 100
Net Profit Margin = 13.28%
The Net Profit Margin has also got better results when the current year is compared with previous year.
Question 3
Formula for Earnings per Share = Net Income / Weighted Average Shares
Weighted Average Shares for Both Years = 98,400 / 10 = 9,840 Shares
For Current Year
Earnings per Share = 31,220 / 9,840
Earnings per Share = $ 3.17
For Previous Year
Earnings per share = 20,580 / 9,840
Earnings per Share = $ 2.09
Earnings per share has also improved in current year, it is better than previous year results.
Question 4
Formula for Return on Equity = Net Income / Average Shareholders Equity * 100
Average Shareholders Equity = ( Opening Balance + Closing Balance ) / 2
Shareholders Equity = Common Stock + Retained Earnings
For Current Year Average Equity = (132,200+155,420)/ 2 = 143,810
For Previous Year Average Equity= (114,000+132,200)/2 = 123,100
For Current Year
Return on Equity = 31,220 / 143,810 * 100
Return on Equity = 21.71%
For Previous Year
Return on Equity = 20,580 / 123,100 * 100
Return on Equity = 16.72%
The Current Year results are better than previous year results.
Question 5
Fixed Assets Turnover Ratio = Sales Revenue / Average Fixed Assets
Average Fixed Assets = (Opening Balance + Closing Balance)/ 2
Fixed Assets heremeans Property and Equipment
For Current Year Average Fixed Assets = (119,000 + 109,000)/2 = 114,000
For Previous Year Average Fixed Assets = (124,000 + 119000)/2 = 121,500
For Current Year
Fixed Assets Turnover Ratio = 180,000 / 114,000
Fixed Assets Turnover Ratio = 1.58 Times
For Previous Year
Fixed Assets Turnover Ratio = 155,000 / 121,500
Fixed Assets Turnover Ratio = 1.28 Times
Current Year Ratio has go better from Previous Year.
Question 7
Times to Interested Earned = Operating Income / Interest Expense
Operating Income = Gross Profit - Operating Expenses
For Current Year Operating Income = 100,000 - 50,000 = 50,000
For Previous Year Operating Income = 79,000 - 44,200 = 34,800
For Current Year
Times Interest Earned = 50,000 / 5,400
Times Interest Earned = 9.26 Times
For Previous Year
Times Interest Earned = 34,800 / 5,40
Times Interest Earned = 6.44 Times
The Ratio has got better in current previous on comparison to previous year.
Question 6
Debt to Assets Ratio = Total Liabilities / Total Assets
For Current Year
Debt to Assets Ratio = 111,350 / 266,770
Debt to Assets Ratio = 0.42 : 1
For Previous Year
Debt to Assets Ratio = 88,800 / 221,000
Debt to Assets Ratio = 0.40 : 1
The Ratio has got better in comparison to previous year.
Question 8
Price Earnings Ratio = Market Price per Share / Earnings per Shre
For Current Year
Price Earnings Ratio = 32 / 3.17
Price Earnings Ratio = 10.09 Times
For Previous Year
Price Earnings Ratio = 29 / 2.09
Price Earnings Ratio = 13.88 Times
The Investors are less optimistic about company's future earnings.
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Required: 1. Compute the gross profit percentage in the current and previous years. Are the current...
6-a. Compute the debt-to-assets ratios for the current and previous years. (Round your answers to 2...
6-a. Compute the debt-to-assets ratios for the current and previous years. (Round your answers to 2 decimal places.) 6-b. Is debt providing financing for a larger or smaller proportion of the company's asset growth? Debt-to-Assets Current Year Previous Year 6-B. Current year debt-to-assets ratio? Larger Proportion Smaller Proportion Required 5 Required 7 > G E VUS years. Are the current year results better, or worse, than those for the previous year? 6. Compute the debt-to-assets ratios for the current and...
Please complete entire PA13-2 with ratios correctly. Use the data given in PA13-1 for pinnacle plus....
Please complete entire PA13-2 with ratios correctly. Use the
data given in PA13-1 for pinnacle plus.
est percentage? LO 13-4, 1 PA13-2 Analyzing Comparative Financial Statements Using Selected Ratios Use the data given in PA13-1 for Pinnacle Plus. Required: 1. Compute the gross profit percentage in the current and previous years. Round the percent- ages to one decimal place. Are the current year results better, or worse, than those for the previous year? 2. Compute the net profit margin for...
Pinnacle Plus declared and paid a cash dividend of $9,100 in the current year. Its comparative...
Pinnacle Plus declared and paid a cash dividend of $9,100 in the current year. Its comparative financial statements, prepared at December 31, reported the following summarized information: Current Year Previous Year Income Statement Sales Revenue $ 235,000 $ 199,000 Cost of Goods Sold 102,000 98,000 Gross Profit 133,000 101,000 Operating Expenses 61,000 53,000 Interest Expense 6,500 6,500 Income before Income Tax Expense 65,500 41,500 Income Tax Expense (30%) 19,650 12,450 Net Income $ 45,850 $ 29,050 Balance Sheet Cash $...
Pinnacle Plus declared and paid a cash dividend of $8,100 in the current year. Its comparative financial statements, prepared at December 31, reported the following summarized information:
Pinnacle Plus declared and paid a cash dividend of $8,100 in the current year. Its comparative financial statements, prepared at December 31, reported the following summarized information: Current YearPrevious YearIncome StatementSales Revenue$185,000$159,000Cost of Goods Sold82,00078,000Gross Profit103,00081,000Operating Expenses51,00045,000Interest Expense5,5005,500Income before Income Tax Expense46,50030,500Income Tax Expense (30%)13,9509,150Net Income$32,550$21,350Balance SheetCash$89,075$23,000Accounts Receivable, Net32,00027,000Inventory40,00053,000Property and Equipment, Net110,000120,000Total Assets$271,075$223,000Accounts Payable$57,000$33,500Income Tax Payable1,3751,250Note Payable (long-term)55,00055,000Total Liabilities113,37589,750Common Stock (par $10)99,00099,000Retained Earnings58,70034,250Total Liabilities and Stockholders’ Equity$271,075$223,000 Required:1. Compute the gross profit percentage in the current and previous years. Are the current year...
Pinnacle Plus declared and paid a cash dividend of $7,800 in the current year. Its comparative...
Pinnacle Plus declared and paid a cash dividend of $7,800 in the current year. Its comparative financial statements, prepared at December 31, reported the following summarized information: Current Year Previous Year $170,000 76,000 94,000 48,000 5,200 40,800 12,240 $ 28,560 $147,000 72,000 75,000 42,600 5, 200 27,200 8,160 $ 19,040 Income Statement Sales Revenue Cost of Goods Sold Gross Profit Operating Expenses Interest Expense Income before Income Tax Expense Income Tax Expense (30%) Net Income Balance Sheet Cash Accounts Receivable,...
The comparative financial statements prepared at December 31 for Pinnacle Plus showed the following summarized data:...
The comparative financial statements prepared at December 31 for Pinnacle Plus showed the following summarized data: Current Year Previous Year Income Statement Sales Revenue Cost of Goods Sold $125,000 58,000 $111,000 54,000 Gross Profit Operating Expenses Interest Expense 67,000 39,000 4,300 57,000 35,400 4.300 Income before Income Tax Expense Income Tax Expense (30%) 23,700 7,110 17,300 5,190 Net Income $ 16,590 $ 12,110 Balance Sheet Cash Accounts Receivable, Net Inventory Property and Equipment, Net $ 73,415 20,000 28,000 98,000 $...
Help Save & Ex Eignment i Che Tiger Audio declared and paid a cash dividend of $7,325 in the current...
Help Save & Ex Eignment i Che Tiger Audio declared and paid a cash dividend of $7,325 in the current year. Its comparative financial statements, prepared at December 31, reported the following summarized information: Current Previous $312,000 163,650 148,350 57,600 5,800 84,950 25,485 $ 59,465 $257,000 147,000 110,000 48,130 5,070 56,800 17,040 $ 39,760 Income Statement Sales Revenue Cost of Goods Sold Gross Profit Operating Expenses Interest Expense Income before Income Tax Expense Income Tax Expense (308) Net Income Balance...
The comparative financial statements prepared at December 31 for Golden Corporation showed the following summarized data:...
The comparative financial statements prepared at December 31 for Golden Corporation showed the following summarized data: Current Previous Income Statement Sales revenue Cost of goods sold $280,000 150,000 $245,000 140,000 Gross profit Operating expenses Interest expense 130,000 73,300 4,700 105,000 66,400 4,600 Income before income taxes Income tax expense 52,000 15,600 34.000 5,000 Net income $ 36,400 $ 29,000 $ Balance Sheet Cash Accounts receivable (net) Inventory Property and equipment (net) 8,100 39,000 60,000 65,000 $ 10,000 33,000 55,000 58,000...
5-a. Net property and equipment totaled $113,000 at the beginning of the previous year. Compute the...
5-a. Net property and equipment totaled $113,000 at the beginning of the previous year. Compute the fixed asset turnover ratios for the current and previous years. (Round your answers to 2 decimal places.) 5-b. Are the current year results better, or worse, than those for the previous year? Fixed Asset Turnover Current Year Previous Year 5-b. Current year fixed asset turnover? Better O Worse < Required 4 Required 6 > Pinnacle Plus declared and paid a cash dividend of $6,900...
Cost of Goods Sold Cross Profit Selling General, and sinistra Income before Income Tax Expe Income...
Cost of Goods Sold Cross Profit Selling General, and sinistra Income before Income Tax Expe Income Tax Expense Net Tato Required: 1. Compute the gross profit percentage for each year. Assuming that the change from 2015 to 2016 is the beginning of a sustained trend, is Computer Tycoon likely to earn more or less gross profit from each dollar of sales in 2017? 2. Compute the net profit margin for each year. Given your calculations here and in requirement explain...
6-a. Compute the debt-to-assets ratios for the current and previous years. (Round your answers to 2 decimal places.) 6-b. Is debt providing financing for a larger or smaller proportion of the company's asset growth? Debt-to-Assets Current Year Previous Year 6-B. Current year debt-to-assets ratio? Larger Proportion Smaller Proportion Required 5 Required 7 > G E VUS years. Are the current year results better, or worse, than those for the previous year? 6. Compute the debt-to-assets ratios for the current and...
Please complete entire PA13-2 with ratios correctly. Use the
data given in PA13-1 for pinnacle plus.
est percentage? LO 13-4, 1 PA13-2 Analyzing Comparative Financial Statements Using Selected Ratios Use the data given in PA13-1 for Pinnacle Plus. Required: 1. Compute the gross profit percentage in the current and previous years. Round the percent- ages to one decimal place. Are the current year results better, or worse, than those for the previous year? 2. Compute the net profit margin for...
Pinnacle Plus declared and paid a cash dividend of $7,800 in the current year. Its comparative financial statements, prepared at December 31, reported the following summarized information: Current Year Previous Year $170,000 76,000 94,000 48,000 5,200 40,800 12,240 $ 28,560 $147,000 72,000 75,000 42,600 5, 200 27,200 8,160 $ 19,040 Income Statement Sales Revenue Cost of Goods Sold Gross Profit Operating Expenses Interest Expense Income before Income Tax Expense Income Tax Expense (30%) Net Income Balance Sheet Cash Accounts Receivable,...
The comparative financial statements prepared at December 31 for Pinnacle Plus showed the following summarized data: Current Year Previous Year Income Statement Sales Revenue Cost of Goods Sold $125,000 58,000 $111,000 54,000 Gross Profit Operating Expenses Interest Expense 67,000 39,000 4,300 57,000 35,400 4.300 Income before Income Tax Expense Income Tax Expense (30%) 23,700 7,110 17,300 5,190 Net Income $ 16,590 $ 12,110 Balance Sheet Cash Accounts Receivable, Net Inventory Property and Equipment, Net $ 73,415 20,000 28,000 98,000 $...
Help Save & Ex Eignment i Che Tiger Audio declared and paid a cash dividend of $7,325 in the current year. Its comparative financial statements, prepared at December 31, reported the following summarized information: Current Previous $312,000 163,650 148,350 57,600 5,800 84,950 25,485 $ 59,465 $257,000 147,000 110,000 48,130 5,070 56,800 17,040 $ 39,760 Income Statement Sales Revenue Cost of Goods Sold Gross Profit Operating Expenses Interest Expense Income before Income Tax Expense Income Tax Expense (308) Net Income Balance...
The comparative financial statements prepared at December 31 for Golden Corporation showed the following summarized data: Current Previous Income Statement Sales revenue Cost of goods sold $280,000 150,000 $245,000 140,000 Gross profit Operating expenses Interest expense 130,000 73,300 4,700 105,000 66,400 4,600 Income before income taxes Income tax expense 52,000 15,600 34.000 5,000 Net income $ 36,400 $ 29,000 $ Balance Sheet Cash Accounts receivable (net) Inventory Property and equipment (net) 8,100 39,000 60,000 65,000 $ 10,000 33,000 55,000 58,000...
5-a. Net property and equipment totaled $113,000 at the beginning of the previous year. Compute the fixed asset turnover ratios for the current and previous years. (Round your answers to 2 decimal places.) 5-b. Are the current year results better, or worse, than those for the previous year? Fixed Asset Turnover Current Year Previous Year 5-b. Current year fixed asset turnover? Better O Worse < Required 4 Required 6 > Pinnacle Plus declared and paid a cash dividend of $6,900...
Cost of Goods Sold Cross Profit Selling General, and sinistra Income before Income Tax Expe Income Tax Expense Net Tato Required: 1. Compute the gross profit percentage for each year. Assuming that the change from 2015 to 2016 is the beginning of a sustained trend, is Computer Tycoon likely to earn more or less gross profit from each dollar of sales in 2017? 2. Compute the net profit margin for each year. Given your calculations here and in requirement explain...
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