Question

Tuxedo Corporation’s condensed comparative income statements and balance sheets follow. All figures are given in thousands of dollars, except earnings per share.


Additional data for Tuxedo in 2014 and 2013 follow.


Balances of selected accounts at the end of 2012 were accounts receivable (net), $52,700; inventory, $99,400; accounts payable, $64,800; total assets, $647,800; and stockholders’ equity, $376,600. All of the bonds payable were long-term liabilities.

Required
Perform the following analyses. (Round to one decimal place.)
1. Prepare an operating asset management analysis by calculating for each year the
(a) Current ratio,
(b) Quick ratio,
(c) Receivables turnover,
(d) Days’ sales uncollected,
(e) Inventory turnover,
(f) Days’ inventory on hand,
(g) Payables turnover,
(h) Days’ payable,
(i) Financing period.
2. Prepare a profitability and total asset management analysis by calculating for each year the
(a) Profit margin,
(b) Asset turnover,
(c) Return on assets.
3. Prepare a financial risk analysis by calculating for each year the
(a) Debt to equity ratio,
(b) Return on equity,
(c) Interest coverage ratio.
4. Prepare a liquidity analysis by calculating for each year the
(a) Cash flow yield,
(b) Cash flows to sales,
(c) Cash flows to assets,
(d) Free cash flow.
5. Prepare an analysis of market strength by calculating for each year the
(a) Price/earnings (P/E) ratio
(b) Dividend yield.
6. After making the calculations, indicate whether each ratio improved or deteriorated from 2013 to 2014 (use F for favorable and U for unfavorable and consider changes of 0.1 or less to beneutral).


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  • CreatedMarch 26, 2014
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