1. Calculate the following Ratios for years 2021 and 2022 (0.45 point for each ratio and...
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1. Calculate the following Ratios for years 2021 and 2022 (0.45 point for each ratio and each year) 2. Compare 2021 to 2022 ratios and highlight in green which ratio is better, then add a one sentence explanation to the right as to why that ratio is better than the other year. (.25 point each ratio) a. ROA b. ROCE c. Current Ratio d. Quick Ratio e. Accounts Receivable Turnover f. Days AR outstanding g. Inventory Turnover h. Days inventory held i. Accounts Payable Turnover j. Days AP outstanding k. Long-term debt to assets I. Interest coverage Ratio m. Operating Cash flow to total liabilities MATH Ratio 2021 (34,026/71,261)*100 2022 (18,849/82, 665) * 100 2021 2022 47.73% 22.80% 11.7 total points 3.25 total points XYZ Company Financial Statements Balance Sheet ($ in millions) Assets Cash Accounts receivable Inventories Short term investments Current assets 2020 For Dec 31, ended 2021 2022 $ 14,612 $ 39,103 $51,229 4,510 6,589 5,681 2,587 3,590 4,181 156 240 251 21,865 49,522 61,342 23,238 24,792 25,491 Less: accumulated depreciation Net fixed assets (1,875) (3,053) (4,168) 21,363 21,739 21,323 Plant Property and Equipment Total assets Liabilities and Equity Accounts payable Accrued liabilities Notes Payable Current liabilities Long-term debt Deferred tax Total liabilities Common Stock Preferred Stock Retained earnings Total Equity Total liabilities and Equity $ 43,228 $ 71,261 $ 82,665 $ 1,281 $ 2,689 $ 3,674 496 358 211 1,300 2,100 3,100 3,077 5,147 6,985 4,178 3,580 3,145 10 45 98 7,265 8,772 10,228 100 100 100 2 2 2 35,861 35,963 62,387 62,489 $ 82,665 $ (0) $ 0 $ (0) NO $ 43,228 $ 71,261 72,335 72,437 Cash Flow Statement ($ in millions) For Dec 31, ended 2021 2022 Net Income $ 34,026 $ 18,849 Adjustment to Net Income Depreciation Expense 1,178 1,115 Inc(Dec) to AR (2,079) 908 Inc to Inventory (1,003) (591) Inc(dec) to ST Investm (84) (11) Inc to NP 800 1,000 Inc to AP 1,408 985 Inc to Accrued Liab (138) (147) Inc to def tax 35 53 Cash Provided by Opera 34,143 22,161 Investing Activities Purchase PPE $ (1,554) $ (699) Cash used by investing $ (1,554) $ (699) Financing Activities Dividends Paid (7,500) (8,900) Long-term debt (598) (435) Cash used by financing (8,098) (9,335) Cash change 24,491 12,127 Cash Beg Balance 14,612 39,103 Cash Ending Balance 39,103 51,230 $ Income Statement ($ millions) Net sales COGS Begin Inventory * 80% are credit sales 2020 2021 $ 69,740 $ 72,531 2022 $ 58,004 1,941 2,587 3,590 + Purchases 18,570 19,540 21,870 = Available 20,511 22,127 25,460 -End Bal inventory 2,587 3,590 4,181 Cost of goods sold 17,924 18,537 21,279 Gross profit 51,816 53,994 36,725 Depreciation expense 3,400 1,178 1,115 Operating expense 7,612 8,134 9,874 Operating profit 40,804 44,682 25,736 Other Expenses Interest expense Profit before tax Income taxes Income from continued operations Discontinued Operations Income from operations, net of tax Loss from disposal, net of tax (857) (956) (1,054) 39,947 43,726 24,682 8,389 9,182 5,183 $ 31,558 $ 34,544 $19,499 29 300 (141) (368) Net income including noncontrolled in $ Less: Income attributable to noncontroll $ 31,446 $ 34,476 $ 19,499 300 $ 450 $ 650 Net income $ 31,146 $ 34,026 $ 18,849 Retained Earnings ($ millions) Beginning Retained Earnings Add: Net Income Less: Preferred Stock Dividends Less: Common Stock Dividends Ending Retained Earnings 2020 2021 2022 $ 10,875 $ 35,861 $ 62,387 31,146 34,026 (560) (5,600) (1,000) (6,500) 18,849 (1,500) (7,400) $ 35,861 $ 62,387 $ 72,335 S - 60 S - S 1. Calculate the following Ratios for years 2021 and 2022 (0.45 point for each ratio and each year) 2. Compare 2021 to 2022 ratios and highlight in green which ratio is better, then add a one sentence explanation to the right as to why that ratio is better than the other year. (.25 point each ratio) a. ROA b. ROCE c. Current Ratio d. Quick Ratio e. Accounts Receivable Turnover f. Days AR outstanding g. Inventory Turnover h. Days inventory held i. Accounts Payable Turnover j. Days AP outstanding k. Long-term debt to assets I. Interest coverage Ratio m. Operating Cash flow to total liabilities MATH Ratio 2021 (34,026/71,261)*100 2022 (18,849/82, 665) * 100 2021 2022 47.73% 22.80% 11.7 total points 3.25 total points XYZ Company Financial Statements Balance Sheet ($ in millions) Assets Cash Accounts receivable Inventories Short term investments Current assets 2020 For Dec 31, ended 2021 2022 $ 14,612 $ 39,103 $51,229 4,510 6,589 5,681 2,587 3,590 4,181 156 240 251 21,865 49,522 61,342 23,238 24,792 25,491 Less: accumulated depreciation Net fixed assets (1,875) (3,053) (4,168) 21,363 21,739 21,323 Plant Property and Equipment Total assets Liabilities and Equity Accounts payable Accrued liabilities Notes Payable Current liabilities Long-term debt Deferred tax Total liabilities Common Stock Preferred Stock Retained earnings Total Equity Total liabilities and Equity $ 43,228 $ 71,261 $ 82,665 $ 1,281 $ 2,689 $ 3,674 496 358 211 1,300 2,100 3,100 3,077 5,147 6,985 4,178 3,580 3,145 10 45 98 7,265 8,772 10,228 100 100 100 2 2 2 35,861 35,963 62,387 62,489 $ 82,665 $ (0) $ 0 $ (0) NO $ 43,228 $ 71,261 72,335 72,437 Cash Flow Statement ($ in millions) For Dec 31, ended 2021 2022 Net Income $ 34,026 $ 18,849 Adjustment to Net Income Depreciation Expense 1,178 1,115 Inc(Dec) to AR (2,079) 908 Inc to Inventory (1,003) (591) Inc(dec) to ST Investm (84) (11) Inc to NP 800 1,000 Inc to AP 1,408 985 Inc to Accrued Liab (138) (147) Inc to def tax 35 53 Cash Provided by Opera 34,143 22,161 Investing Activities Purchase PPE $ (1,554) $ (699) Cash used by investing $ (1,554) $ (699) Financing Activities Dividends Paid (7,500) (8,900) Long-term debt (598) (435) Cash used by financing (8,098) (9,335) Cash change 24,491 12,127 Cash Beg Balance 14,612 39,103 Cash Ending Balance 39,103 51,230 $ Income Statement ($ millions) Net sales COGS Begin Inventory * 80% are credit sales 2020 2021 $ 69,740 $ 72,531 2022 $ 58,004 1,941 2,587 3,590 + Purchases 18,570 19,540 21,870 = Available 20,511 22,127 25,460 -End Bal inventory 2,587 3,590 4,181 Cost of goods sold 17,924 18,537 21,279 Gross profit 51,816 53,994 36,725 Depreciation expense 3,400 1,178 1,115 Operating expense 7,612 8,134 9,874 Operating profit 40,804 44,682 25,736 Other Expenses Interest expense Profit before tax Income taxes Income from continued operations Discontinued Operations Income from operations, net of tax Loss from disposal, net of tax (857) (956) (1,054) 39,947 43,726 24,682 8,389 9,182 5,183 $ 31,558 $ 34,544 $19,499 29 300 (141) (368) Net income including noncontrolled in $ Less: Income attributable to noncontroll $ 31,446 $ 34,476 $ 19,499 300 $ 450 $ 650 Net income $ 31,146 $ 34,026 $ 18,849 Retained Earnings ($ millions) Beginning Retained Earnings Add: Net Income Less: Preferred Stock Dividends Less: Common Stock Dividends Ending Retained Earnings 2020 2021 2022 $ 10,875 $ 35,861 $ 62,387 31,146 34,026 (560) (5,600) (1,000) (6,500) 18,849 (1,500) (7,400) $ 35,861 $ 62,387 $ 72,335 S - 60 S - S
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Related Book For
Principles Of Financial Accounting
ISBN: 9781118757147
1st Canadian Edition
Authors: Jerry J. Weygandt, Michael J. Atkins, Donald E. Kieso, Paul D. Kimmel, Valerie Ann Kinnear, Barbara Trenholm, Joan E. Barlow
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