The following information is available for Nguoi Corporation. a. Compute earnings per share for 2022 and 2021
Question:
The following information is available for Nguoi Corporation.
a. Compute earnings per share for 2022 and 2021 for Nguoi, and comment on the change. Nguoi’s primary competitor, Matisse Corporation, had earnings per share of $1 per share in 2022. Comment on the diff erence in the ratios of the two companies.
b. Compute the current ratio and debt to assets ratio for each year, and comment on the changes.
c. Compute free cash fl ow for each year, and comment on the changes.
2021 2022 $ 54,000 $ 36,000 Current assets Total assets 240,000 205,000 Current liabilities 22,000 30,000 Total liabilities 72,000 100,000 Net income 80,000 40,000 Net cash provided by operating activities 90,000 56,000 Preferred dividends 6,000 6,000 Common dividends 3,000 1,500 $ 27,000 $ 12,000 Expenditures on property, plant, and equipment Common shares outstanding at beginning of year Common shares outstanding at end of year 40,000 30,000 75,000 40,000
Step by Step Answer:
a Nguois profitability as measured by the amount of income available for each share of ...View the full answer
Financial Accounting Tools for Business Decision Making
ISBN: 978-1119493631
9th edition
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso
Related Video
The current ratio is a financial ratio that measures a company\'s ability to pay its short-term obligations with its short-term assets. It is calculated by dividing a company\'s current assets by its current liabilities. The formula for calculating the current ratio is: Current Ratio = Current Assets / Current Liabilities Current assets are assets that can be converted to cash within one year, while current liabilities are debts that are due within one year. A current ratio of 1:1 or greater is generally considered good, as it indicates that a company has enough current assets to cover its current liabilities. A current ratio of less than 1:1 may suggest that a company may have difficulty meeting its short-term obligations. It\'s important to note that the current ratio is just one of many financial ratios that can be used to assess a company\'s financial health. It should be used in conjunction with other financial ratios and qualitative factors to make informed decisions about investing or lending to a company.
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