A condensed balance sheet and other financial data for the Nike Company are provided below. Nike...

  
  

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A condensed balance sheet and other financial data for the Nike Company are provided below. Nike Company Balance Sheet as at December 31, 20X1 ASSETS Current assets Plant assets Total assets LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Long-term liabilities Total liabilities Common Stock $1 par value Retained Earnings Total liabilities and stockholders' equity NB: Inventory at 31 December 20X1 is $30 000 $110,000 140,000 $250,000 $100,000 65,000 $165,000 70,000 15,000 $250,000 Income statement data for the year ended 31 December 20X1 are recorded below: $375,000 6,000 30,500 Net sales Interest expense Net income Additional information as at 31 December 20XO is shown below: Total assets Stockholders' equity The tax rate is 30 percent. $200,000 $65,000 GOVE Income statement data for the year ended 31 December 20X1 are recorded below: Net sales Interest expense Net income Additional information as at 31 December 20X0 is shown below: Total assets Stockholders' equity The tax rate is 30 percent. Industry norms/averages for the same ratios as of December 31, 20X1, are: 1.75 $0.26 Debt to equity ratio Earnings per share Return on total assets Return on stockholders' equity Acid test ratio Current Ratio Times interest earned $375,000 6,000 30,500 6.5% 36% 0.85:1 1.02:1 4 times $200,000 $65,000 Required: a: From the information above calculate for 31 December 20X1 the following ratios: 1. if. iv. Question 2 b. Analyse the firm's performance using the industry norms/averages outlined above. The analysis should be based on 1. Profitability Debt to Equity ratio Earnings per share Return on total assets Return on capital employed Acid test ratio 1. Current ratio Times interest earned ratio Required The following are some terms used in financial management Time value of money Agency Theory Working capital management Liquidity and Debt Management a) Briefly explain each term outlined above b) Differentiate between a risky asset and a risk free asset. c) Briefly explain three limitations of ratio analysis. A condensed balance sheet and other financial data for the Nike Company are provided below. Nike Company Balance Sheet as at December 31, 20X1 ASSETS Current assets Plant assets Total assets LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Long-term liabilities Total liabilities Common Stock $1 par value Retained Earnings Total liabilities and stockholders' equity NB: Inventory at 31 December 20X1 is $30 000 $110,000 140,000 $250,000 $100,000 65,000 $165,000 70,000 15,000 $250,000 Income statement data for the year ended 31 December 20X1 are recorded below: $375,000 6,000 30,500 Net sales Interest expense Net income Additional information as at 31 December 20XO is shown below: Total assets Stockholders' equity The tax rate is 30 percent. $200,000 $65,000 GOVE Income statement data for the year ended 31 December 20X1 are recorded below: Net sales Interest expense Net income Additional information as at 31 December 20X0 is shown below: Total assets Stockholders' equity The tax rate is 30 percent. Industry norms/averages for the same ratios as of December 31, 20X1, are: 1.75 $0.26 Debt to equity ratio Earnings per share Return on total assets Return on stockholders' equity Acid test ratio Current Ratio Times interest earned $375,000 6,000 30,500 6.5% 36% 0.85:1 1.02:1 4 times $200,000 $65,000 Required: a: From the information above calculate for 31 December 20X1 the following ratios: 1. if. iv. Question 2 b. Analyse the firm's performance using the industry norms/averages outlined above. The analysis should be based on 1. Profitability Debt to Equity ratio Earnings per share Return on total assets Return on capital employed Acid test ratio 1. Current ratio Times interest earned ratio Required The following are some terms used in financial management Time value of money Agency Theory Working capital management Liquidity and Debt Management a) Briefly explain each term outlined above b) Differentiate between a risky asset and a risk free asset. c) Briefly explain three limitations of ratio analysis.