University:
Grand Rapids Community College
Course:
Financial and Managerial Accounting: Information for Decisions - John J. Wild
Academic year:

2024
Views:

86

Pages:

2
Author:

stud_ice13

Problem 13-1A: Calculating and Analyzing Trend Percents (P1) 1. Calculate trend percentages for each component in Haroun Company’s financial statements, using 2015 as the base year. 2. Analysis: Based on trend percentages: o (a) Assess if sales grew steadily. o (b) Determine if net income as a percent of sales improved over the four years. o (c) Evaluate whether inventory levels increased over the period. Problem 13-2A: Ratios, Common-Size Statements, and Trend Percents (P1, P2, P3) 1. Calculate current ratios for each year, rounding to one decimal. 2. Express income statement data as common-size percentages, rounded to two decimals. 3. Calculate trend percentages for balance sheet data using 2019 as the base year. 4. Analysis: o (a) Compare the cost of goods sold as a percentage of sales over the years. o (b) Determine if income as a percent of sales improved recently. o (c) Assess whether plant assets have grown. Problem 13-3A: Transactions, Working Capital, and Liquidity Ratios (P3) 1. Using the initial conditions (current assets, current ratio, and acid-test ratio), prepare a table to show how each of Plum Corporation's transactions affects: o (1) Current ratio o (2) Acid-test ratio o (3) Working capital 2. Ensure results are rounded to two decimals. o Checkpoints are given for ratios and working capital after specific transactions to verify accuracy. Problem 13-4A: Calculating Financial Statement Ratios (P3) 1. With Cabot Corporation’s financial data, compute the following ratios: Current ratio, acid-test ratio, days’ sales uncollected, inventory turnover, days’ sales in inventory, debt-to-equity ratio, times interest earned, profit margin ratio, total asset turnover, return on total assets, and return on equity. o Round all ratios to one decimal, except for the debt-to-equity ratio (two decimals). 2. Checkpoints provided for certain ratios to ensure accuracy. o Problem 13-5A: Comparative Ratio Analysis (P3) 1. For two competing companies: o Compute short-term credit risk ratios: Current ratio, acid-test ratio, accounts receivable turnover, inventory turnover, days’ sales in inventory, and days’ sales uncollected. o Assess which company is a better short-term credit risk and justify. 2. Investment analysis: o Calculate each company's profit margin ratio, total asset turnover, return on total assets, return on equity, price-earnings ratios, and dividend yields. o Compare and determine the preferable stock investment, providing reasons. Problem 13-6AA: Income Statement Computations and Format (A2) 1. With Olinda Corporation’s data, and assuming a 30% income tax rate: o (1) Identify tax effects and after-tax amounts for pretax items. o (2) Compute income from continuing operations before taxes, tax expense, and net income from continuing operations. o (3) Determine the after-tax income (loss) related to the discontinued segment. o (4) Calculate the total net income for the year. o Checkpoints provide specific amounts to verify parts of the solution.