Presented below are condensed financial statements adapted from those of two actual companies competing in the...

   

Transcribed Image Text:

Presented below are condensed financial statements adapted from those of two actual companies competing in the pharmaceutical industry-Benatar and Jett, Inc. ($ in millions, except per share amounts). Assets: Cash Balance Sheets (5 in millions, except per share data) Short-term investments Accounts receivable (net) Inventory Other current assets Current assets Property, plant, and equipment (net) Intangibles and other assets Total assets Liabilities and Shareholders' Equity: Accounts payable Short-term notes Other current liabilities Current liabilities Long-term debt Other long-term liabilities Total liabilities Common stock (par and additional paid-in capital) Retained earnings Accumulated other comprehensive income (loss) Benatar Jett $ 8,195 $ 3,980 4,668 7,154 4,112 3,930 28,059 11,270 16,446 $55,775 $ 5,506 2,063 7,843 15,412 3,455 5,483 24,350 3,720 35,023 (670) Naut 10,924 9,355 6,751 3,795 34,805 19,711 69,771 $124,287 $ 3,141 9,742 12,738 25,621 6,255 22,478 54,354 67,650 33,802 215 Retained earnings Accumulated other comprehensive income (loss) Less: Treasury stock and other equity adjustments Total shareholders' equity Total liabilities and shareholders' equity Income Statements Net sales Cost of goods sold. Gross profit Operating expenses Other (income) expense-net Income before taxes Income tax expense Net income Basic net income per share 35,023 (670) (6,648) (31,734) 31,425 69,933 $55,775 $124,287 Droi $44,002 12,680 31,322 20,251 F (445) 11,516 3,455 33,802 215 $ 47,328 10,336 36,992 28,974 3,670 4,348 1,304 $8,061 $ 3,044 $ 2.62 $ 0.42 *This is before income from discontinued operations. Evaluate and compare the two companies by responding to the following questions. Note: Because two-year comparative statements are not provided, you should use year-end balances in place of average balances as appropriate. Required: 1. For both companies, compute the ratios below. (Consider 365 days a year. Do not round intermediate calculations. Round "Asset Turnover" answers to 3 decimal places and other final answers to 2 decimal places.) Check my w Nevt > my w Note: Because two-year comparative statements are not provided, you should use year-end balances in place of average balances as appropriate. Required: 1. For both companies, compute the ratios below. (Consider 365 days a year. Do not round intermediate calculations. Round "Asset Turnover" answers to 3 decimal places and other final answers to 2 decimal places.) Receivables Turnover Average Collection Period Inventory Turnover Average Days in Inventory Profit Margin Asset Turnover Return on Assets Equity Multiplier Return on Equity Benatar times days times days % times % % Jett times days times days % times % % Presented below are condensed financial statements adapted from those of two actual companies competing in the pharmaceutical industry-Benatar and Jett, Inc. ($ in millions, except per share amounts). Assets: Cash Balance Sheets (5 in millions, except per share data) Short-term investments Accounts receivable (net) Inventory Other current assets Current assets Property, plant, and equipment (net) Intangibles and other assets Total assets Liabilities and Shareholders' Equity: Accounts payable Short-term notes Other current liabilities Current liabilities Long-term debt Other long-term liabilities Total liabilities Common stock (par and additional paid-in capital) Retained earnings Accumulated other comprehensive income (loss) Benatar Jett $ 8,195 $ 3,980 4,668 7,154 4,112 3,930 28,059 11,270 16,446 $55,775 $ 5,506 2,063 7,843 15,412 3,455 5,483 24,350 3,720 35,023 (670) Naut 10,924 9,355 6,751 3,795 34,805 19,711 69,771 $124,287 $ 3,141 9,742 12,738 25,621 6,255 22,478 54,354 67,650 33,802 215 Retained earnings Accumulated other comprehensive income (loss) Less: Treasury stock and other equity adjustments Total shareholders' equity Total liabilities and shareholders' equity Income Statements Net sales Cost of goods sold. Gross profit Operating expenses Other (income) expense-net Income before taxes Income tax expense Net income Basic net income per share 35,023 (670) (6,648) (31,734) 31,425 69,933 $55,775 $124,287 Droi $44,002 12,680 31,322 20,251 F (445) 11,516 3,455 33,802 215 $ 47,328 10,336 36,992 28,974 3,670 4,348 1,304 $8,061 $ 3,044 $ 2.62 $ 0.42 *This is before income from discontinued operations. Evaluate and compare the two companies by responding to the following questions. Note: Because two-year comparative statements are not provided, you should use year-end balances in place of average balances as appropriate. Required: 1. For both companies, compute the ratios below. (Consider 365 days a year. Do not round intermediate calculations. Round "Asset Turnover" answers to 3 decimal places and other final answers to 2 decimal places.) Check my w Nevt > my w Note: Because two-year comparative statements are not provided, you should use year-end balances in place of average balances as appropriate. Required: 1. For both companies, compute the ratios below. (Consider 365 days a year. Do not round intermediate calculations. Round "Asset Turnover" answers to 3 decimal places and other final answers to 2 decimal places.) Receivables Turnover Average Collection Period Inventory Turnover Average Days in Inventory Profit Margin Asset Turnover Return on Assets Equity Multiplier Return on Equity Benatar times days times days % times % % Jett times days times days % times % %

Answer rating: 100% (QA)

SOLUTION Recievable Bentat Jett Tumover Bentar Avuage collection Period Jett I... View the full answer