Refer the following table. Focus Metals Inc. Comparative Balance Sheet Information: November 30 (millions of $)...
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Refer the following table. Focus Metals Inc. Comparative Balance Sheet Information: November 30 (millions of $) 2020 Cash 16 86 Accounts receivable (net). 386 232 60 53 Inventory Plant and equipment (net) 2,546 2,630 Accounts payable 262 178 1,700 2,260 Long-term notes payable* Common shares 300 300 Retained earnings 746 263 *90% of the plant and equipment are secured by long-term notes payable. Focus Metals Inc. Income Statement For Year Ended November 30 (millions of $) 2020 2019 Net sales $ 2,580 $1,782 Cost of goods sold 902 692 Gross profit $1,678 $1,090 Operating expenses: Depreciation expense Other expenses $ 88 577 Total operating expenses 665 Profit from operations 425 Interest expense 144 Income tax expense 48 Profit 233 $ 2019 88 $ 710 798 880 $ 110 44 726 S K Required: Calculate Focus Metals solvency ratios for 2019 and 2020. (Round the final answers to 2 decimal places.) Ratio 2020 2019 Debt ratio % % Equity ratio % % 1 :1 Pledged assets to secured liabilities Times interest earned times times Analysis Component: Identify whether the change in each ratio from 2019 to 2020 was favourable or unfavourable. Favourable! Ratio Unfavourable Debt ratio Equity ratio Pledged assets to secured liabilities Times interest eamed Refer the following table. Focus Metals Inc. Comparative Balance Sheet Information: November 30 (millions of $) 2020 Cash 16 86 Accounts receivable (net). 386 232 60 53 Inventory Plant and equipment (net) 2,546 2,630 Accounts payable 262 178 1,700 2,260 Long-term notes payable* Common shares 300 300 Retained earnings 746 263 *90% of the plant and equipment are secured by long-term notes payable. Focus Metals Inc. Income Statement For Year Ended November 30 (millions of $) 2020 2019 Net sales $ 2,580 $1,782 Cost of goods sold 902 692 Gross profit $1,678 $1,090 Operating expenses: Depreciation expense Other expenses $ 88 577 Total operating expenses 665 Profit from operations 425 Interest expense 144 Income tax expense 48 Profit 233 $ 2019 88 $ 710 798 880 $ 110 44 726 S K Required: Calculate Focus Metals solvency ratios for 2019 and 2020. (Round the final answers to 2 decimal places.) Ratio 2020 2019 Debt ratio % % Equity ratio % % 1 :1 Pledged assets to secured liabilities Times interest earned times times Analysis Component: Identify whether the change in each ratio from 2019 to 2020 was favourable or unfavourable. Favourable! Ratio Unfavourable Debt ratio Equity ratio Pledged assets to secured liabilities Times interest eamed
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Debt Ratio Total Debt Total Assets 2020 2019 26217001... View the full answer
Related Book For
Fundamental Accounting Principles Volume II
ISBN: 978-1260305838
16th Canadian edition
Authors: Kermit Larson, Tilly Jensen, Heidi Dieckmann
Posted Date:
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