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3 years ago

Use the information from the balance sheet and income statement below to calculate the following ratios:

Business

1 answer:

Marina86 [1]3 years ago

4 0

Answer:

a. Current Ratio = current assets / current liabilities = 190,000 / 153,000 = 1.24

b. Acid-test ratio = (current assets - inventory) / current liabilities = (190,000 - 50,000) / 153,000 = 0.92

c. Times interest earned = EBIT / interest expense = 65,000 / 8,000 = 8.13

d. Inventory turnover = COGS / inventory = 90,000 / 50,000 = 1.8

e. Total asset turnover = net sales / total assets = 210,000 / 525,000 = 0.4

f. Operating profit margin = operating income / total sales = 65,000 / 210,000 = 0.31

g. Days in receivables = (accounts receivables / total sales) x 365 = (30,000 / 210,000) x 365 = 52.14 days

h. Operating return on assets = operating income / total assets = 65,000 / 525,000 = 0.12

i. Debt ratio = total liabilities / total assets = 273,000 / 525,000 = 0.52

j. Fixed asset turnover = total sales / fixed assets = 210,000 / 335,000 = 0.63

k. Return on equity = net income / total equity = 45,030 / 252,000 = 0.18

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First National Bank charges 13.1 percent compounded monthly on its business loans. First United Bank charges 13.4 percent compou

FinnZ [79.3K]

Answer:

EAR for First national Bank = 13.92 %

EAR for First United Bank = 13.85 %

Explanation:

given data

First National Bank charges = 13.1 percent

compounded monthly , 1 year = 12 month

First United Bank charges = 13.4 percent

compounded semiannually , 1 year = 2 semiannually

solution

we get here first EAR for First national Bank that is express as

EAR for First national Bank = $(1+ \frac{r}{n} )^n - 1$ .....................1

here r is rate and n is month

so put here value

EAR for First national Bank = $(1+ \frac{0.131}{12} )^{12} - 1$

EAR for First national Bank = 13.92 %

and

EAR for First United Bank is

EAR for First United Bank = $(1+ \frac{r}{n} )^n - 1$ ..................2

here r is rate and n is semi annually

EAR for First United Bank = $(1+ \frac{0.134}{2} )^2 - 1$

EAR for First United Bank = 13.85 %

here First United bank EAR is less

5 0

3 years ago

At the end of the fiscal year, the usual adjusting entry for depreciation on equipment was omitted. Which of the following state

Anton [14]

Answer:

c. Net income will be overstated for the current year.

Explanation:

Depreciation is defined as the reduction in the value of an asset over the period of it's useful life.

The deductions are calculated and taken out of the asset value on the balance sheet.

The adjusting entry for depreciation at the end of year is a debit to Depreciation Expense and a credit to Accumulated depreciation.

If this entry is no passed it means that Depreciation Expense is not recognised for that year.

Net income will be overstated because generally expenses will be understated.

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3 years ago

For which of the following businesses would the job order cost system be appropriate? a.oil refinery b.canned soup processor c.l

attashe74 [19]

Answer:

The correct answer is letter "C": lumber mill.

Explanation:

Job orders are forms that are given to workers that typically represent a third party to a company so they can perform a specific work. Besides, the job order includes the time expected for the worker to finish the job, the estimated wage charged, the materials needed to perform the job, and the number of employees necessary.

<em>Lumber mills</em> typically work with job orders to provide with cut pieces of wood to furniture enterprises.

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3 years ago

A fully global organization might set up a ________ with a foreign company to create a new, independent company that produces a

Archy [21]

Answer:

Explanation:

8 0

3 years ago

A firm is planning on increasing its annual dividend by 3.50% a year in perpetuity. The company just paid its annual dividend in

uysha [10]

Answer:

c.) $1.73

Explanation:

Price = $\frac{D0(1+g)}{(r-g)}$

D0= Last dividend paid

r= rate of return

g = growth rate

Price = $\frac{0.20(1.035)}{(0.1550-0.035)}$

Price = 0.207 / 0.12

Price = 1.725

Therefore, the current value of the stock is $1.73

5 0

3 years ago