This problem is based on the 2017 annual report of Campbell Soup Company in the appendix. Required:

Question:

This problem is based on the 2017 annual report of Campbell Soup Company in the appendix.


Required:

a. Compute the following profitability measures for the year ended July 30, 2017:

1. Return on investment, based on net earnings (perform a DuPont analysis).

2. Return on equity, based on net earnings and total equity.

3. Price/earnings ratio. Use $52.85 as the year-end market price.

4. Dividend yield.

5. Dividend payout ratio.

b. Compute the following liquidity measures at July 30, 2017:

1. Working capital.

2. Current ratio.

3. Acid-test ratio.

c. Compute the following activity measures for the year ended July 30, 2017:

1. Number of days’ sales in accounts receivable, based on a 365-day year.

2. Number of days’ sales in inventory, based on a 365-day year.

3. Accounts receivable turnover.

4. Inventory turnover.

5. Turnover of net property, plant, and equipment.

d. Compute the following financial leverage measures at July 30, 2017:

1. Debt ratio.

2. Debt/equity ratio.
e. Compute the following physical measures of Campbell’s profitability at July 30, 2017:


1. Net sales per employee.

2. Operating income per employee. (Note: In a page not reproduced in the appendix, Campbell’s 2017 annual report disclosed that on July 30, 2017, the company had approximately 18,000 employees.)

Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...
Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
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Accounting What the Numbers Mean

ISBN: 978-1260565492

12th edition

Authors: David Marshall, Wayne McManus, Daniel Viele

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