CHAP 5 Ratio Analysis - Tài liệu tham khảo | Đại học Hoa Sen

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PHD.NGUYEN THANH NAM
CHAPTER 5: RATIO
1. Financial statements for Harvey Company follow:
Harvey Company
Income Statements
for the Years Ended December 31
Unit: $
2015
2014
Revenues
Net sales 315,000
259,000
Expenses
Cost of goods sold 189,000
154,000
General, selling, and administrative
expenses 54,000
46000
Interest expense 4,000
4500
Income before taxes 68,000
54,500
Income tax expense (40%) 27,200
21,800
Net income 40,800
32,700
Harvey Company
Balance Sheets
As of December 31
Unit: $
2015
2014
Assets
Current assets
Cash 6,500
11,500
Accounts receivable 51,000
49,000
Inventories 155,000
147,500
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PHD.NGUYEN THANH NAM
Total current assets 212,500
208,000
Plant and equipment (net) 187,500
177,000
Total assets 400,000
385,000
Liabilities and Stockholders’ Equity
Liabilities
Current liabilities
Accounts payable 60,000
81,500
Other 25,000
22,500
Total current liabilities 85,000
104,000
Bonds payable 100,000
100,000
Total liabilities 185,000
204,000
Stockholders’ equity
Common stock (50,000 shares, $3 par) 150,000
150,000
Paid-In capital in excess of par 20,000
20,000
Retained earnings 45,000
11,000
Total stockholders’ equity 215,000
181,000
Total liabilities and stockholders’ equity 400,000
385,000
Required
Calculate the ratios for 2014 and 2015 and evaluate the company’s efficiency in
managing its assets, its ability to pay short-term debts, its financial risk and its
profitability.
When data limitations prohibit computingaverages, use year-end balances in your
calculations.
2. Data from Greenwich’s financial statements and industry average are as follow:
Unit: $
2014
2015
2016
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PHD.NGUYEN THANH NAM
Sales 700,000
800,000
900,000
COGS 450,000
500,000
540,000
Cash 15,000
17,000
20,000
Marketable
securities
18,000
22,000
20,000
Notes receivable 3,000
3,000
4,000
Accounts
receivable
52,000
56,000
50,000
Merchandise
inventory
40,000
43,000
70,000
Prepaid expenses 2,000
4,000
4,000
Current assets 130,000
145,000
168,000
Fixed assets (net) 300,000
310,000
340,000
Total assets 430,000
455,000
508,000
Accounts payable 22,000
25,000
30,000
Current liabilities 40,000
43,000
46,000
Industry averages
Receivables turnover: 12
Inventory turnover 12
Total assets turnover 2.5
Fixed assets turnover 3
Payable turnover 20.5
Working capital
turnover
8.5
Current ratio 2
Quick ratio 1
Cash ratio 0.5
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PHD.NGUYEN THANH NAM
Please analyze and evaluate the company’s asset managing efficiency and short-
term obligation paying capacity for the year 2016 and 2015 ( comparision with
industry figures)
3. Here are some data of two companies:
($ millions)
Best buy Circuit City
Revenues 600
1,000
Earnings before
interest and taxes
40
130
Interest expense 10
0
Earnings before
taxes
30
130
Taxes 10
50
Net income 20
80
Total assets 300
400
Total debt 120
70
Shareholders’
equity
180
330
Use the extended DuPont analysis to explain the critical factors that account for
the differences in the two companies’ ROEs
4. Berlin’s financial statements are as follow:
BERLIN CORPORATION
Balance Sheets
December 31, 2016
Unit: $1,000
2016
2015
Assets
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PHD.NGUYEN THANH NAM
Cash and marketable securities 3,000
2,000
Marketable securities 5,000
4,000
Accounts receivable (net) 47,000
44,000
Inventories 50,000
60,000
Prepaid expense 2,000
1,000
Total current assets 107,000
111,000
Property, plant and equipment (net) 100,000
105,000
Investments 1,000
1,000
Long-term receivables 3,000
2,000
Goodwill and patents, net 2,000
4,000
Other assets 2,000
3,000
Total long-term assets 108,000
115,000
Total assets 215,000
226,000
Liabilities and equity
Notes payable 3,000
5,000
Accounts payable 12,000
16,000
Accrued expenses 9,000
11,000
Income taxes payable 1,000
1,000
Current portion of long-term debt 3,000
2,000
Total current liabilities 28,000
35,000
Bonds payable 30,000
30,000
Long-term debt 20,000
30,000
Deferred taxes 30,000
27,000
Other liabilities 5,000
4,000
Total long-term liabilities 85,000
91,000
Common stock 25,000
25,000
Additional paid-in capital, common 35,000
35,000
Retained earnings 42,000
40,000
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PHD.NGUYEN THANH NAM
Total equity 102,000
100,000
Total liabilities and equity 215,000
226,000
5.
RLIN CORPORATION
Income Statement and Retained Earnings
Year Ended December 31, 20016
Unit: $1,000
2016
2015
Net sales 180,000
150,000
Cost of good sold 147,000
120,000
Gross profit 33,000
30,000
Selling, general, and administrative expenses 25,000
28,000
Operating profit 8,000
2,000
Financial income 1,000
2,000
Financial expenses 10,500
3,000
Earning before taxes (1,500)
1,000
Taxes 0
200
Net income (1,500)
800
Required:
When data limitations prohibit computingaverages, use year-end balances in your
calculations.
a. Calculate the ratios : current ratio, quick ratio, cash ratio, fixed assets turnover,
total assets turnover, debt ratio, financial leverage, interest coverage ratio,
operating profit margin, ROS, ROA, ROE for 2016 and 2015
b. Analyse ROE with traditional Dupont and extended Dupont.
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PHD.NGUYEN THANH NAM
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1 CHAPTER 5: RATIO
1. Financial statements for Harvey Company follow: Harvey Company Income Statements
for the Years Ended December 31 Unit: $ 2015 2014 Revenues Net sales 315,000 259,000 Expenses Cost of goods sold 189,000 154,000
General, selling, and administrative expenses 54,000 46000 Interest expense 4,000 4500 Income before taxes 68,000 54,500 Income tax expense (40%) 27,200 21,800 Net income 40,800 32,700 Harvey Company Balance Sheets As of December 31 Unit: $ 2015 2014 Assets Current assets Cash 6,500 11,500 Accounts receivable 51,000 49,000 Inventories 155,000 147,500 PHD.NGUYEN THANH NAM 2 Total current assets 212,500 208,000 Plant and equipment (net) 187,500 177,000 Total assets 400,000 385,000
Liabilities and Stockholders’ Equity Liabilities Current liabilities Accounts payable 60,000 81,500 Other 25,000 22,500 Total current liabilities 85,000 104,000 Bonds payable 100,000 100,000 Total liabilities 185,000 204,000 Stockholders’ equity
Common stock (50,000 shares, $3 par) 150,000 150,000
Paid-In capital in excess of par 20,000 20,000 Retained earnings 45,000 11,000 Total stockholders’ equity 215,000 181,000
Total liabilities and stockholders’ equity 400,000 385,000 Required
Calculate the ratios for 2014 and 2015 and evaluate the company’s efficiency in
managing its assets, its ability to pay short-term debts, its financial risk and its profitability.
When data limitations prohibit computingaverages, use year-end balances in your calculations.
2. Data from Greenwich’s financial statements and industry average are as follow: Unit: $ 2014 2015 2016 PHD.NGUYEN THANH NAM 3 Sales 700,000 800,000 900,000 COGS 450,000 500,000 540,000 Cash 15,000 17,000 20,000 Marketable 18,000 22,000 20,000 securities Notes receivable 3,000 3,000 4,000 Accounts 52,000 56,000 50,000 receivable Merchandise 40,000 43,000 70,000 inventory Prepaid expenses 2,000 4,000 4,000 Current assets 130,000 145,000 168,000 Fixed assets (net) 300,000 310,000 340,000 Total assets 430,000 455,000 508,000 Accounts payable 22,000 25,000 30,000 Current liabilities 40,000 43,000 46,000 Industry averages Receivables turnover: 12 Inventory turnover 12 Total assets turnover 2.5 Fixed assets turnover 3 Payable turnover 20.5 Working capital 8.5 turnover Current ratio 2 Quick ratio 1 Cash ratio 0.5 PHD.NGUYEN THANH NAM 4
Please analyze and evaluate the company’s asset managing efficiency and short-
term obligation paying capacity for the year 2016 and 2015 ( comparision with industry figures)
3. Here are some data of two companies:
($ millions) Best buy Circuit City Revenues 600 1,000 Earnings before 40 130 interest and taxes Interest expense 10 0 Earnings before 30 130 taxes Taxes 10 50 Net income 20 80 Total assets 300 400 Total debt 120 70 Shareholders’ 180 330 equity
Use the extended DuPont analysis to explain the critical factors that account for
the differences in the two companies’ ROEs
4. Berlin’s financial statements are as follow: BERLIN CORPORATION Balance Sheets December 31, 2016 Unit: $1,000 2016 2015 Assets PHD.NGUYEN THANH NAM 5
Cash and marketable securities 3,000 2,000 Marketable securities 5,000 4,000 Accounts receivable (net) 47,000 44,000 Inventories 50,000 60,000 Prepaid expense 2,000 1,000 Total current assets 107,000 111,000
Property, plant and equipment (net) 100,000 105,000 Investments 1,000 1,000 Long-term receivables 3,000 2,000 Goodwill and patents, net 2,000 4,000 Other assets 2,000 3,000 Total long-term assets 108,000 115,000 Total assets 215,000 226,000 Liabilities and equity Notes payable 3,000 5,000 Accounts payable 12,000 16,000 Accrued expenses 9,000 11,000 Income taxes payable 1,000 1,000
Current portion of long-term debt 3,000 2,000 Total current liabilities 28,000 35,000 Bonds payable 30,000 30,000 Long-term debt 20,000 30,000 Deferred taxes 30,000 27,000 Other liabilities 5,000 4,000 Total long-term liabilities 85,000 91,000 Common stock 25,000 25,000
Additional paid-in capital, common 35,000 35,000 Retained earnings 42,000 40,000 PHD.NGUYEN THANH NAM 6 Total equity 102,000 100,000 Total liabilities and equity 215,000 226,000 5. RLIN CORPORATION
Income Statement and Retained Earnings
Year Ended December 31, 20016 Unit: $1,000 2016 2015 Net sales 180,000 150,000 Cost of good sold 147,000 120,000 Gross profit 33,000 30,000
Selling, general, and administrative expenses 25,000 28,000 Operating profit 8,000 2,000 Financial income 1,000 2,000 Financial expenses 10,500 3,000 Earning before taxes (1,500) 1,000 Taxes 0 200 Net income (1,500) 800 Required:
When data limitations prohibit computingaverages, use year-end balances in your calculations.
a. Calculate the ratios : current ratio, quick ratio, cash ratio, fixed assets turnover,
total assets turnover, debt ratio, financial leverage, interest coverage ratio,
operating profit margin, ROS, ROA, ROE for 2016 and 2015
b. Analyse ROE with traditional Dupont and extended Dupont. PHD.NGUYEN THANH NAM 7 PHD.NGUYEN THANH NAM