Below are the financial statements of Morning Glory Enterprise for the financial year 2019. Cash Accounts...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Below are the financial statements of Morning Glory Enterprise for the financial year 2019. Cash Accounts receivable Inventory Marketable securities MORNING GLORY ENTERPRISE BALANCE SHEET AS AT 31 DECEMBER 2019 (RM) Plant and equipment Land and buildings Less: Accumulated depreciation TOTAL ASSETS Sales Less: Cost of goods sold Gross Profit Less: Operating expenses Earnings before interest and taxes Less: Interest expenses Earnings before taxes Less: Taxes (40%) Net Income 1. Current ratio Quick ratio Debt ratio Times Interest Earned Average collection period ii. 140,000 66,500 520,000 380,000 1,860,000 820,500 625.000 3,162,000 MORNING GLORY ENTERPRISE INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2019 6,500,000 3,200,000 3,300,000 1,050,000 2,250,000 500,000 1,750,000 Accounts payable Notes payable Accruals 700,000 1,050,000 Long term debt Debentures Common stock Retained earnings TOTAL CLAIMS Industry Average 2.56 X 1.35 X 60 % 7X 38 days 124,000 70,000 108,000 560,000 640,000 910,000 750,000 3,162,000 Fixed asset turnover Inventory turnover Net profit margin Return on asset Return on equity 6.3 X 3 X 10.80 % 21.56% 53% Given the above industry averages, calculate the indicated ratios for the year 2019. Based on your answer in (1). evaluate the overall performance of the company according to liquidity, activity, profitability and leverage ratios. Below are the financial statements of Morning Glory Enterprise for the financial year 2019. Cash Accounts receivable Inventory Marketable securities MORNING GLORY ENTERPRISE BALANCE SHEET AS AT 31 DECEMBER 2019 (RM) Plant and equipment Land and buildings Less: Accumulated depreciation TOTAL ASSETS Sales Less: Cost of goods sold Gross Profit Less: Operating expenses Earnings before interest and taxes Less: Interest expenses Earnings before taxes Less: Taxes (40%) Net Income 1. Current ratio Quick ratio Debt ratio Times Interest Earned Average collection period ii. 140,000 66,500 520,000 380,000 1,860,000 820,500 625.000 3,162,000 MORNING GLORY ENTERPRISE INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2019 6,500,000 3,200,000 3,300,000 1,050,000 2,250,000 500,000 1,750,000 Accounts payable Notes payable Accruals 700,000 1,050,000 Long term debt Debentures Common stock Retained earnings TOTAL CLAIMS Industry Average 2.56 X 1.35 X 60 % 7X 38 days 124,000 70,000 108,000 560,000 640,000 910,000 750,000 3,162,000 Fixed asset turnover Inventory turnover Net profit margin Return on asset Return on equity 6.3 X 3 X 10.80 % 21.56% 53% Given the above industry averages, calculate the indicated ratios for the year 2019. Based on your answer in (1). evaluate the overall performance of the company according to liquidity, activity, profitability and leverage ratios.
Expert Answer:
Answer rating: 100% (QA)
i Calculations Current Ratio Current Ratio 140000 66500 520000 380000 124000 70000 108000 Current Ratio 236 Quick Ratio Quick Ratio 140000 66500 38000... View the full answer
Related Book For
Fundamental financial accounting concepts
ISBN: 978-0078025365
8th edition
Authors: Thomas P. Edmonds, Frances M. Mcnair, Philip R. Olds, Edward
Posted Date:
Students also viewed these accounting questions
-
The following are the financial statements of the parent company Alpha plc, a subsidiary company Beta and an associate company Gamma. On 1 January 20X5 Alpha plc acquired 80% of Beta plc for...
-
The following are the financial statements of Nosker Company. Additional data: 1. Dividends declared and paid were $20,000. 2. During the year equipment was sold for $8,500 cash. This equipment cost...
-
The following are the financial statements of Nosker Company. Nosker Company Income Statement For the Year Ended December 31, 2020 Sales revenue ....................................$242,000 Cost of...
-
A machine fills containers with a particular product. The standard deviation of filling weights computed from past data is 0.6 ounces. If only 2% of the containers hold less than 18 ounces, what is...
-
What is the optimal capital structure for a firm?
-
A solid disk of mass m 1 = 9.4 kg and radius R = 0.24 m is rotating with a constant angular velocity of = 35 rad/s. A thin rectangular rod with mass m 2 = 3.1 kg and length L = 2R = 0.48 m begins at...
-
The distributed loading is supported by the three suspender bars. AB and EF are made of aluminum and CD is made of steel. If each bar has a cross-sectional area of 450 mm 2 , determine the maximum...
-
Early in the year, John Raymond founded Raymond Engineering Co. for the purpose of manufacturing a special flow control valve that he had designed. Shortly after year-end, the companys accountant was...
-
At 1 2 / 3 1 / 2 2 , the end of Jenner Company's first year of business, inventory was $ 6 , 1 0 0 and $ 5 , 1 0 0 at cost and at market, respectively. Following is data relative to the 1 2 / 3 1 / 2...
-
The Harvey City Comprehensive Case consists of the last problem in each chapter from Chapters 4 through 15. Completing this case essentially requires that you account for all the transactions of a...
-
Two Charges (q1 and q2) are located 1 m apart. They are both positive, but q2 is double the charge of ql. Where between the two charges is the charge equal from each point?
-
How does climate change occur? What are some of the public health risks of climate change? Which populations are the most vulnerable to climate change health risks? What is the difference between...
-
Given that human power consumption is 15 Terawatts, what area (in km2) would be required to be covered with solar panels? Assume that these solar panels are able to convert 40 Watts per square meter...
-
Do you think it is computationally feasible to calculate the behavior of individual gas particles using conservation of momentum and energy for a room full of air? Explain.
-
1. From your chief executive: How does a fl exible benefi ts scheme work and how would we benefi t from introducing one? 2. From the fi nance director: I am sure most of our employees do not...
-
A uniform meter stick is supported by a knife edge at the 50-cm mark. Neglect the mass of the meter stick. Mass A (4 kg) is hanging at 30-cm mark and mass B (6 kg) is hanging 80-cm. Where a third...
-
( 2 cos(22)-2 z5 (z - i) 1 Evaluate the integral Here C is the circle given by [2] = dz by using the Laurent series of f(z) = = in positive direction. 2 cos(2x) - 2 z5 (z - i)
-
What will be the final value of DI after executing the following piece of code? Execute the instructions dependently one after another. CLD MOU CX,OFOH MOU AX.02874H MOU DI,01000H MOU ES, DI SUB...
-
At the end of 2013 the following information is available for Badger and Marmot companies: Required a. Prepare a common size income statement for each company. b. Compute the return on assets and...
-
Faello Inc. experienced the following events for the first two years of its operations: 2013: 1. Provided $80,000 of services on account. 2. Provided $22,000 of services and received cash. 3....
-
At the end of 2013, the following information is available for Short and Wise Companies: Required a. Set up the spreadsheet shown here. Complete the income statements by using Excel formulas. b....
-
What is the value of Queens Park PLCs preferred stock when the dividend rate is 10 percent on a $100 par value? The appropriate discount rate for a stock of this risk level is 16 percent.
-
Midwest Energy Group has issued preferred stocks ($10 par value) that pay 8 percent dividend annually. If the required rate of return is 15 percent, what is the value of the stock?
-
Calculate the value of Swatchs preferred stock that pays a dividend of $8 per share if your required rate of return is 14 percent.
Study smarter with the SolutionInn App