Question: (Compare ratios and comment on results) Selected financial data for two intense competitors in a recent year follow (amounts in millions): Eonline Corporation Paperky Company

(Compare ratios and comment on results) Selected financial data for two intense competitors in a recent year follow (amounts in millions):

Eonline Corporation Paperky Company

Statement of income data:

Net sales

$9,496 $4,671

Cost of goods sold

8,114 4,193

Selling and administrative expenses

574 130

Interest expense

530 182

Other expenses

26 9

Income taxes

154 83

Net income

$98 $74

Statement of cash flows data:

Net cash inflow from operating activities

$727 $353

Net increase in cash during the year

109 29

Statement of financial position data:

End-of-year balances:

Cash

$312 $431

Other current assets

1,939 994

Long-term assets

5,499 3,610

Total assets

$7,750 $5,035

Current liabilities

$1,107 $805

Long-term debt

4,460 3,123

Total shareholders equity

2,183 1,107

Total liabilities and shareholders equity

$7,750 $5,035

Beginning-of-year balances:

Total assets

$7,267 $4,525

Total shareholders equity

1,745 1,061

Other data:

Average net receivables

$1,112 $649

Average inventory

807 509

(a) For each company, calculate the following ratios: (Round accounts receivable turnover, inventory turnover and current ratio to 2 decimal places, e.g. 14.83. Round net debt as a percentage of total capitalization to 2 decimal places, e.g. 0.83. Round average collection period, days to sell inventory, interest coverage, return on asset, return on equity, cash flows to total liabilities, gross margin and profit margin to 1 decimal place, e.g. 14.8 or 13.5%.)

i. Average collection period for receivables
ii. Days to sell inventory
iii. Current ratio
iv. Net debt as a percentage of total capitalization
v. Interest coverage (depreciation expense was $414 for Eonline and $260 for Paperky)
vi. Return on assets
vii. Return on equity
viii. Cash flows to total liabilities
ix. Gross margin
x. Profit margin

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