Ronald Corporation (Ronald') is engaged in selling of toy guns. The company has a total of...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Ronald Corporation ("Ronald') is engaged in selling of toy guns. The company has a total of 20,000 shares of stock outstanding. The balance sheet and income statement of Ronald are shown below. Cash Accounts receivable Inventory Net fixed assets Total assets Balance Sheet 2023 $6,710 $9,551 Sales Cost of goods sold Depreciation E. $3,510 $35,000 $54,771 Total liabilities and owners' equity Income Statement 2023 Accounts payable Notes payable A. Calculate Ronald's net profit margin. Long-term debt Common stock Earnings before interest and taxes Interest paid Taxable income Taxes (32%) Net income B. Calculate Ronald's earnings per share. C. Calculate Ronald's net working capital, D. $46,800 $18,100 $6,480 $22,220 $5,270 $16,950 $5,424 $11,526 $6,819 $8,280 14,780 $24,892 $54,771 (4 marks) (4 marks) (4 marks) (4 marks) Calculate Ronald's day's sales in receivables. Calculate Ronald's times interest earned. (4 marks) F. Ronald's day's sales in receivables this year is lower than last year. Does this mean the ratio has improved or deteriorated? Explain. (2 marks) G. Ronald's times interest earned this year is higher than last year. Does this mean the ratio has improved or deteriorated? Explain. (2 marks) H. Sometimes the financial ratios of different years of the same company are compared to analyze the company's financial situation (as in part F&G). What is this type of analysis called? (1 marks) Ronald Corporation ("Ronald') is engaged in selling of toy guns. The company has a total of 20,000 shares of stock outstanding. The balance sheet and income statement of Ronald are shown below. Cash Accounts receivable Inventory Net fixed assets Total assets Balance Sheet 2023 $6,710 $9,551 Sales Cost of goods sold Depreciation E. $3,510 $35,000 $54,771 Total liabilities and owners' equity Income Statement 2023 Accounts payable Notes payable A. Calculate Ronald's net profit margin. Long-term debt Common stock Earnings before interest and taxes Interest paid Taxable income Taxes (32%) Net income B. Calculate Ronald's earnings per share. C. Calculate Ronald's net working capital, D. $46,800 $18,100 $6,480 $22,220 $5,270 $16,950 $5,424 $11,526 $6,819 $8,280 14,780 $24,892 $54,771 (4 marks) (4 marks) (4 marks) (4 marks) Calculate Ronald's day's sales in receivables. Calculate Ronald's times interest earned. (4 marks) F. Ronald's day's sales in receivables this year is lower than last year. Does this mean the ratio has improved or deteriorated? Explain. (2 marks) G. Ronald's times interest earned this year is higher than last year. Does this mean the ratio has improved or deteriorated? Explain. (2 marks) H. Sometimes the financial ratios of different years of the same company are compared to analyze the company's financial situation (as in part F&G). What is this type of analysis called? (1 marks)
Expert Answer:
Answer rating: 100% (QA)
SOLUTIONS A Net profit margin Net Income Sales x 100 5424 46800 x 100 116 B Earnings per share Net I... View the full answer
Related Book For
Horngrens Financial and Managerial Accounting
ISBN: 978-0133866292
5th edition
Authors: Tracie L. Nobles, Brenda L. Mattison, Ella Mae Matsumura
Posted Date:
Students also viewed these finance questions
-
Consider the following information: State of Economy Boom Good Poor Bust Probability of Rate of Return if State Occurs State of Economy Stock A Stock B Stock C .10 .30 .40 .20 .50 .15 .11 .09 .35...
-
List three specific parts of the Case Guide, Objectives and Strategy Section (See below) that you had the most difficulty understanding. Describe your current understanding of these parts. Provide...
-
Brayden files his Federal income tax return by April 15 but does not pay the tax. Although he expects to pay interest on the large amount of tax he still owes, he feels that the timely filing has...
-
John and Jane Darling are newlyweds trying to decide among several available rentals. Alternatives were scored on a scale of 1 to 5 (5 best) against weighted performance criteria, as shown in Table....
-
When you jump from a significant height, why is it advantageous to land with your knees slightly bent?
-
On March 20, Yang Ltd.'s petty cash fund of 1,000 is replenished when the fund contains 90 in cash and receipts for postage 520, freight-out 260, and travel expense 100. Prepare the journal entry to...
-
How to obtain an extension of time and continuances?
-
For each of the following situations based on SAB No. 101, indicate the audit evidence that should be obtained to determine whether revenue should be recognized or not in the current period. 1. Your...
-
At the end of the accounting period, there may be some work-in-progress, i.e. semi-finished goods may be there in a process The valuation of such work-in-progress is done in terms of equivalent or...
-
The bank portion of the bank reconciliation for Carlin Company at November 30, 2012, is shown here and on the next page. The adjusted cash balance per bank agreed with the cash balance per books at...
-
Specific Electrics Co. asks you to implement a pay-for-performance incentive contract for its new CEO and four EVP\'s on the Executive Committee. The five managers can either work really hard with 70...
-
What does the yield spread between the off-therun Treasury issue and the on-the-run Treasury issue reflect?
-
Why is it impossible for the Fed to target, at the same time, both the Fed funds interest rate and the level of reserves in the banking system?
-
a. What is the credit risk associated with a U.S. Treasury security? b. Why is the Treasury yield considered the base interest rate? c. What is meant by on-the-run Treasuries? d. What is meant by...
-
On October 19, 2007, the yield for three on-the-run issues as reported by Yahoo.com was two-year Treasury \(3.90 \%\) five-year Treasury \(4.14 \%\) 10-year Treasury \(4.49 \%\) Compute all of the...
-
Who are the potential intermediaries in a quotedriven market?
-
Your company uses the following delta-hedging strategy of a long position in A&B shares and a short position in call options. Each call option is on one share of A&B. A&B does not pay...
-
In Exercises delete part of the domain so that the function that remains is one-to-one. Find the inverse function of the remaining function and give the domain of the inverse function. f(x) = 16x4 -3...
-
Sloan Manufacturing makes carrying cases for portable electronic devices. Its costing records yield the following information: Requirements 1. Which type of costing system is Sloan using? What piece...
-
Metal Foundry uses a predetermined overhead allocation rate to allocate overhead to individual jobs, based on the machine hours required. At the beginning of 2016, the company expected to incur the...
-
Lazio, Inc. has compiled the following data: Purchases of Raw Materials..........$ 6,600 Freight In................. 500 Property Taxes.............. 1,200 Ending Inventory of Raw Materials........
-
A public company's audit committee should consist of: a. Representatives of management, shareholders, suppliers, and customers. b. The audit partner, chief financial officer, legal counsel, and at...
-
An independent auditor has been approached to perform an audit. Research suggests that the auditor may fail to: a. Distinguish between a regulated and nonregulated industry. b. Coordinate audit dates...
-
To avoid misunderstandings between a practitioner and client, engagement arrangements are written in: a. A legal letter. b. An engagement letter. c. A client representation letter. d. A letter on...
Study smarter with the SolutionInn App