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Naddik [55]
3 years ago
14

Condensed balance sheet and income statement data for Jergan Corporation are presented here.

Business
1 answer:
IgorLugansk [536]3 years ago
7 0

Answer:

Jergen Corporation

                                             2019                2020

(1) Profit margin Ratios:           13%                10%

(2) Gross profit rate               39.2%             35.7%

(3) Asset turnover                   1.06                 1.02

(4) Earnings per share         $2.63              $1.80

(5) Price-earnings ratio =       3.2x                4.2x

(6) Payout ratio =                 62%                76%

(7) Debt to assets ratio =   32%                28%

Explanation:

a) Data and Calculations:

Jergan Corporation

Balance Sheets

December 31

                                                 2020        2019        2018

Cash                                     $ 29,300    $ 17,300    $ 17,000

Accounts receivable (net)      49,900       44,100       47,800

Other current assets             90,900      96,000      63,900

Investments                           55,200      70,200      45,600

Plant and equipment (net)  500,700    370,600    358,000

                                          $726,000 $598,200 $532,300

Current liabilities                 $84,800    $79,100    $70,300

Long-term debt                    145,700     85,900      50,800

Total debt                         $230,500  $165,000    $121,100

Common stock, $10 par     348,000   320,000     312,000

Retained earnings               147,500     113,200      99,200

                                         $726,000 $598,200 $532,300

Jergan Corporation

Income Statement

For the Years Ended December 31

                                                            2020           2019

Sales revenue                                $743,000    $606,900

Less: Sales returns and allowances 40,000        29,500

Net sales                                          703,000       577,400

Cost of goods sold                          427,400       371,500

Gross profit                                     275,600      205,900

Operating expenses

(including income taxes)                 184,210        148,160

Net income                                    $ 91,390      $ 57,740

                                                     2020       2019     2018

Market price of common stock  $8.50      $7.50   $7.00

                                               2020        2019        2018

Retained earnings               147,500       113,200     99,200

Net income                         $ 91,390    $ 57,740

Dividend paid                     $57,090     $43,740

Outstanding shares             34,800       32,000

Dividend per share              $1.64         $1.37

Average Assets:             $662,100        $565,250

                    ($726,000 + $598,200)/2  ($598,200 + $532,300)/2

a) Ratios:

                                      2019                                  2020

(1) Profit margin Ratios: 13% ($91,390/$703,000)  10% ($57,740/$577,400)

(2) Gross profit rate     39.2%                                35.7%

                ($275,600/$703,000)                          ($205,900/$577,400)

(3) Asset turnover          1.06                                 1.02

                 $703,000/$662,100                          $577,400/$565,250

(4) Earnings per share $2.63 ($ 91,390/34,800)   $1.80 ($57,740/32,000)

(5) Price-earnings ratio = 3.2 ($8.50/$2.63)     4.2 ($7.50/$1.80)

(6) Payout ratio =            62% ($1.64/$2.63)     76% ($1.37/$1.80)

(7) Debt to assets ratio =      32%                             28%

                                       ($230,500/$726,000)    ($165,000/$598,200)

     

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deff fn [24]

Answer:

C. using more liberal credit terms to increase sales

Explanation:

According to the question  it is given that the ratio of account receivable turnover has measured that comes 12 times which means it took 30 days

= 365 ÷ 12

= 30.41

= 30 days

But according to the competition, the ratio of account receivable turnover is 8 times so the competitor took 45 days

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5 0
3 years ago
On October 1, Eder Fabrication borrowed $60 million and issued a nine-month promissory note. Interest was payable at maturity. I
7nadin3 [17]

Answer:

cash        55,110,929 debit

   note payable      55,110,929 credit

--to record singing of promissory note with discounted interest--

interest expense 1.583.741,77 debit

   note payable              1.583.741,77 credit

--to record accrued interest on note payable --

Explanation:

the note plus interest will be for 60 millions.

So to calcualte the isuance ofthe note we must calculate the present value of a lump sum at 12% discount rate:

\frac{Maturity}{(1 + rate)^{time} } = PV  

Maturity  60,000,000.00

time   0.75

rate  0.12

\frac{60000000}{(1 + 0.12)^{0.75} } = PV  

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then at December 31th we solve for the accrued interest:

Principal \: (1+ r)^{time} = Amount

Principal 55,110,929.18

time 0.25 (3 months over 12 month a year)

rate 0.12000

55110929.18154 \: (1+ 0.12)^{0.25} = Amount

Amount 56,694,670.95

accrued interest: 56,694,670.95 - 55,110,929.18 = 1.583.741,77

8 0
3 years ago
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= 365 / 50

= 7.3 days

Days sales outstanding = 365 / 8

= ‭45.625‬ days

Days payable outstanding = 365 / 7

= 52.14 days

Cash conversion cycle = 7.3 + 45.625 - 52.14

= 0.785 days

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Learn more about joint cost here brainly.com/question/14988439

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