Refer to the balance sheet and income statement for Abercrombie Supply Company for the year ended June
Question:
a. Inventory turnover.
b. Days sales outstanding.
c. Total asset turnover.
d. Fixed asset turnover.
e. Total debt ratio.
f. Debt-to-equity ratio.
g. Times-interest-earned.
h. Cash coverage.
Abercrombie Supply Company Income Statement for the Fiscal Year Ended June 30, 2017 ($ thousands) Net sales $2,110,965 Cost of goods sold Selling and administrative expenses Nonrecurring expenses Earnings before interest, taxes, depreciation, and amortization (EBITDA) 1,459,455 312,044 27,215 $ 312,251 112,178 Depreciation Earnings before interest and taxes (EBIT) Interest expense Earnings before taxes (EBT) Taxes (35%) $ 200,073 117,587 $ 82,486 28,870 $ 53,616 Net income Abercrombie Supply Company Balance Sheet as of June 30, 2017 ($ thousands) Liabilities and Equity: Accounts payable Notes payable Assets: Cash and marketable securities $ 396,494 $ 817,845 Accounts receivable 708,275 101,229 Inventory 1,152,398 Accrued income taxes 41,322 Other current assets 42,115 Total current liabilities $ 960,396 Total current assets $2,299,282 Long-term debt 1,149,520 Net plant and equipment 1,978,455 Total liabilities $2,109,916 Common stock 1,312,137 Retained earnings Total common equity Total liabilities and equity 855,684 $2,167,821 Total assets $4,277,737 $4,277,737
Step by Step Answer:
Ratio Calculation Value Inventory turnover 1459455 1152398 127 Days sa...View the full answer
Fundamentals of Corporate Finance
ISBN: 978-1119371403
4th edition
Authors: Robert Parrino, David S. Kidwell, Thomas Bates
Related Video
Depreciation of non-current assets is the process of allocating the cost of the asset over its useful life. The cost of the asset includes the purchase price, any additional costs incurred to bring the asset to its current condition and location, and any other costs that are directly attributable to the asset. The useful life of the asset is the period over which the asset is expected to be used by the company. To calculate the depreciation, companies use different methods such as straight-line, declining-balance, sum-of-the-years\'-digits, units-of-production, and group depreciation. The chosen method will depend on the type of asset, the company\'s accounting policies, and the accounting standards that are applicable. The straight-line method allocates an equal amount of the asset\'s cost over its useful life, while the declining-balance method calculates depreciation at a fixed rate, typically double the straight-line rate, but the amount of depreciation decreases over time. The sum-of-the-years\'-digits method is similar to the declining-balance method, but the rate of depreciation is calculated using a fraction that is based on the useful life of the asset. It\'s important to note that the depreciation expense will be recorded on the company\'s income statement and the accumulated depreciation will be recorded on the company\'s balance sheet. This will decrease the value of the asset on the balance sheet over time.
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