Ch 09: End-of-Chapter Problems - Analysis of Financial Statements Cost of goods sold Administrative expenses Operating...

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Ch 09: End-of-Chapter Problems - Analysis of Financial Statements Cost of goods sold Administrative expenses Operating income Interest expense Taxes Net income 192,000,000 27,000,000 $ -12,000,000 7,000,000 300,000 $ -19,300,000 Assets Cash Accounts receivable Inventory Plant and equipment Red Brick Balance Sheet as of 12/31/20X2 Liabilities and Stockholders' Equity 500,000 Accounts payable 35,000,000 Notes payable * 77,400,000+ Long-term debt 125,000,000 Stockholders' equity $ 40,000,000 7,000,000 43,000,000 147,900,000 $ 237,900,000 -70% of sales are on credit. + Previous year's inventory was $56,500,000. Company's Industry Ratios (Previous Average Year) Current ratio 2.2:1 2.4:1 Quick ratio 0.7:1 0.7:1 Inventory turnover 5.0x 4.7x Average collection 54 days 55 days period Debt ratio 31% 40% (debt/total assets) Times-interest- -1.7 3.5 earned Return on equity -16.0% 14.1% Return on assets Operating profit margin -9.5% -4.5% 10.2% 14.9% Net profit margin -7.2% 8.6% $ 237,900,000 To help decide whether to grant the loan, compute the following ratios and compare the results with the company's previous year ratios and industry averages. Assume there are 365 days in a year. Do not round intermediate calculations. Round your answers to two decimal places. Current ratio of times is higher than the industry average and higher than the ratio in the previous year. Quick ratio of times is lower than the industry average and higher than the ratio in the previous year. Inventory turnover ratio of Average collection period of Debt ratio of is lower than the industry average and lower than the ratio in the previous year. days is higher than the industry average and higher than the ratio in the previous year. the industry average and higher than the ratio in the previous year. % is lower than Times-interest-earned ratio of Return on equity ratio of Return on assets ratio of is lower than the industry average and equal to the ratio in the previous year. % is lower than the industry average and higher than the ratio in the previous year. % is lower than the industry average and higher than the ratio in the previous year. Ch 09: End-of-Chapter Problems - Analysis of Financial Statements Cost of goods sold Administrative expenses Operating income Interest expense Taxes Net income 192,000,000 27,000,000 $ -12,000,000 7,000,000 300,000 $ -19,300,000 Assets Cash Accounts receivable Inventory Plant and equipment Red Brick Balance Sheet as of 12/31/20X2 Liabilities and Stockholders' Equity 500,000 Accounts payable 35,000,000 Notes payable * 77,400,000+ Long-term debt 125,000,000 Stockholders' equity $ 40,000,000 7,000,000 43,000,000 147,900,000 $ 237,900,000 -70% of sales are on credit. + Previous year's inventory was $56,500,000. Company's Industry Ratios (Previous Average Year) Current ratio 2.2:1 2.4:1 Quick ratio 0.7:1 0.7:1 Inventory turnover 5.0x 4.7x Average collection 54 days 55 days period Debt ratio 31% 40% (debt/total assets) Times-interest- -1.7 3.5 earned Return on equity -16.0% 14.1% Return on assets Operating profit margin -9.5% -4.5% 10.2% 14.9% Net profit margin -7.2% 8.6% $ 237,900,000 To help decide whether to grant the loan, compute the following ratios and compare the results with the company's previous year ratios and industry averages. Assume there are 365 days in a year. Do not round intermediate calculations. Round your answers to two decimal places. Current ratio of times is higher than the industry average and higher than the ratio in the previous year. Quick ratio of times is lower than the industry average and higher than the ratio in the previous year. Inventory turnover ratio of Average collection period of Debt ratio of is lower than the industry average and lower than the ratio in the previous year. days is higher than the industry average and higher than the ratio in the previous year. the industry average and higher than the ratio in the previous year. % is lower than Times-interest-earned ratio of Return on equity ratio of Return on assets ratio of is lower than the industry average and equal to the ratio in the previous year. % is lower than the industry average and higher than the ratio in the previous year. % is lower than the industry average and higher than the ratio in the previous year.