Question
In: Accounting
Pronghorn Inc. and Culver Corporation are Canadian fertilizer companies. The following information has been taken from...
Pronghorn Inc. and Culver Corporation are Canadian fertilizer
companies. The following information has been taken from their
financial statements for the fiscal years ended December 31. All
figures are in millions of dollars.
| CULVER | 2021 | 2020 | 2019 | |||
| Net sales | $8,862.0 | $4,544.1 | $3,049.5 | |||
| Gross profit | 5,228.1 | 1,885.0 | 1,053.4 | |||
| Profit | 3,534.2 | 1,167.0 | 675.0 |
| PRONGHORN | 2021 | 2020 | 2019 | |||
| Net sales | $9,217 | $5,710 | $4,306 | |||
| Gross profit | 3,590 | 1,694 | 885 | |||
| Profit | 1,193 | 410 | 36 |
1) Calculate both companies’ gross profit margin and profit margin
for the years 2019 through 2021. (Round answers to 1
decimal place, e.g.52.7%.)
2)
Determine which company had the best performance for profitability in each year.
3) Using horizontal analysis, calculate the percentage change between the following years: 2019 and 2020; 2020 and 2021 for both companies. (Round answers to 1 decimal place, e.g.52.7%.)
4) Using the information in the horizontal analysis, identify the company that had the most improvement in net sales, gross profit margin and profit margin in 2020 and 2021.
Solutions
Expert Solution
| Part 1 | |||||
| CULVER | |||||
| (All Figures are in $ millions) | |||||
| Particulars | 2021 | 2020 | 2019 | ||
| Net Sales | 8,862.0 | 4,544.1 | 3,049.5 | ||
| Gross Profit | 5,228.1 | 1,885.0 | 1,053.4 | ||
| Net Profit | 3,534.2 | 1,167.0 | 675.0 | ||
| Gross Profit Margin(Gross Profit / Net Sales) | 59.0% | 41.5% | 34.5% | ||
| Net Profit Margin(Net Profit / Net Sales) | 39.9% | 25.7% | 22.1% | ||
| PRONGHORN | |||||
| (All Figures are in $ millions) | |||||
| Particulars | 2021 | 2020 | 2019 | ||
| Net Sales | 9,217.0 | 5,710.0 | 4,306.0 | ||
| Gross Profit | 3,590.0 | 1,694.0 | 885.0 | ||
| Net Profit | 1,193.0 | 410.0 | 36.0 | ||
| Gross Profit Margin(Gross Profit / Net Sales) | 38.9% | 29.7% | 20.6% | ||
| Net Profit Margin(Net Profit / Net Sales) | 12.9% | 7.2% | 0.8% | ||
| Part 2 | |||||
| Clearly CULVER has the best performance in terms of profitability. | |||||
| Part 3 | |||||
| CULVER | |||||
| Year ended 2019 and 2020 | |||||
| Horizontal Analysis | |||||
| Increase/(Decrease) in 2020 | |||||
| 2019 | 2020 | Amount | Percentage | ||
| Net Sales Revenue | 3,049.5 | 4,544.1 | 1,494.6 | 49.0% | |
| Gross Profit | 1,053.4 | 1,885.0 | 831.6 | 78.9% | |
| Net Profit | 675.0 | 1,167.0 | 492.0 | 72.9% | |
| CULVER | |||||
| Year ended 2020 and 2021 | |||||
| Horizontal Analysis | |||||
| Increase/(Decrease) in 2021 | |||||
| 2020 | 2021 | Amount | Percentage | ||
| Net Sales Revenue | 4,544.1 | 8,862.0 | 4,317.9 | 95.0% | |
| Gross Profit | 1,885.0 | 5,228.1 | 3,343.1 | 177.4% | |
| Net Profit | 1,167.0 | 3,534.2 | 2,367.2 | 202.8% | |
| PRONGHORN | |||||
| Year ended 2019 and 2020 | |||||
| Horizontal Analysis | |||||
| Increase/(Decrease) in 2020 | |||||
| 2019 | 2020 | Amount | Percentage | ||
| Net Sales Revenue | 4,306.0 | 5,710.0 | 1,404.0 | 32.6% | |
| Gross Profit | 885.0 | 1,694.0 | 809.0 | 91.4% | |
| Net Profit | 36.0 | 410.0 | 374.0 | 1038.9% | |
| PRONGHORN | |||||
| Year ended 2020 and 2021 | |||||
| Horizontal Analysis | |||||
| Increase/(Decrease) in 2021 | |||||
| 2020 | 2021 | Amount | Percentage | ||
| Net Sales Revenue | 5,710.0 | 9,217.0 | 3,507.0 | 61.4% | |
| Gross Profit | 1,694.0 | 3,590.0 | 1,896.0 | 111.9% | |
| Net Profit | 410.0 | 1,193.0 | 783.0 | 191.0% | |
| Part 4 | |||||
| In terms of Net Sales - CULVER is improved it's sales much better than Pronghorn in both 2019/2020 and 2020/2021 | |||||
| In terms of Gross Profit - PRONGHORN has improved it's Gross profit much better than Culver in 2019/2020 but in 2020/2021 CULVER has improved better | |||||
| In terms of Net Profit - PRONGHORN has improved it's Net profit much better than Culver in 2019/2020 but in 2020/2021 CULVER has improved better | |||||
ekkarill92 answered 1 year agoRelated Solutions
The following information has been obtained for Culver Corporation. 1. Prior to 2017, taxable income and...
The following information has been obtained for Culver
Corporation. 1. Prior to 2017, taxable income and pretax financial
income were identical. 2. Pretax financial income is $1,649,000 in
2017 and $1,476,000 in 2018. 3. On January 1, 2017, equipment
costing $1,140,000 is purchased. It is to be depreciated on a
straight-line basis over 5 years for tax purposes and over 8 years
for financial reporting purposes. (Hint: Use the half-year
convention for tax purposes, as discussed in Appendix 11A.) 4....
The following information has been taken from the ledger accounts of Nash Corporation. Total income since...
The following information has been taken from the ledger
accounts of Nash Corporation.
Total income since incorporation
$337,000
Total cash dividends paid
57,000
Total value of stock dividends distributed
30,000
Gains on treasury stock transactions
19,000
Unamortized discount on bonds payable
30,000
Determine the current balance of retained earnings.
Current balance of retained earnings
$enter the current balance of retained earnings in
dollars
The information shown below was taken from the annual manufacturing overhead cost budget of Culver Company....
The information shown below was taken from the annual
manufacturing overhead cost budget of Culver Company.
Variable manufacturing overhead costs
$27,720
Fixed manufacturing overhead costs
$12,600
Normal production level in labor hours
12,600
Normal production level in units
4,200
Standard labor hours per unit
3
During the year, 4,100 units were produced, 19,000 hours were
worked, and the actual manufacturing overhead was $40,760. Actual
fixed manufacturing overhead costs equaled budgeted fixed
manufacturing overhead costs. Overhead is applied on the basis...
The following information has been taken from the consolidation worksheet of Graham Company and its 80%...
The following information has been taken from the consolidation
worksheet of Graham Company and its 80% owned subsidiary, Stage
Company. (1.) Graham reports a loss on sale of land (to an outside
party) of $5,000. The land cost Graham $20,000. (2.) Noncontrolling
interest in Stage's net income was $30,000. (3.) Graham paid
dividends of $15,000. (4.) Stage paid dividends of $10,000. (5.)
Excess acquisition-date fair value over book value amortization was
$6,000. (6.) Consolidated accounts receivable decreased by $8,000.
(7.)...
The following information has been taken from the statement of financial position of Cos plc (Cos),...
The following information has been taken from the statement of
financial position of Cos plc (Cos), a HK listed company:
HK$ m
Equity and Reserves
Ordinary shares
15
Reserves
29
44
6% preference shares
6
50
Non-current Liabilities
4% Redeemable Bonds
18
Current Liabilities
Trade and other creditors
12
Total Equity and liabilities
80
The ordinary shares of Cos have a nominal value of HK$5 per
share and a current market price of HK$31 per share.
The 6% preference shares...
The following information has been taken from the perpetual inventory system of Imperial Mfg. Co. for...
The following information has been taken from the perpetual
inventory system of Imperial Mfg. Co. for the month ended September
30:
Purchases of direct materials
...........................................
$72,000
Direct Materials Used
...........................................
$70,000
Direct labor costs assigned in production
...........................................
$40,000
Manufacturing overhead labor costs incurred
...........................................
$60,000
Balances in Inventory
Sept. 30
Sept. 1
Materials
$?
$60,000
Work in Progress
$35,000
$45,000
Finished Goods
$88,000
$76,000
Prepare the Income Statement for the month of September;
Net Sales amount to $900,000...
The following information has been provided on ABC, a Canadian controlled private corporation for the year ended December 31, 2020.
The following information has been provided on ABC, a Canadian
controlled private corporation for the year ended December 31,
2020.The following statement has been provided:Sales$895,000Cost of sales$450,000General and administrative expenses225,000Research and development expenditures75,000Operating income$145,000Other income35,000Net income before taxes180,000Provision for income taxes – current and future40,000Net income after taxes$140,000You have been provided some notes on the above information:The information in the following notes has already been
reflected in the above income statement.Amortization expense recorded in the financial statements
$25,000Landscaping costs re:...
E15-16 (Computation of Retained Earnings) The following information has been taken from the ledger accounts of...
E15-16 (Computation of Retained Earnings) The following information has been taken from the ledger accounts of Isaac Stern Corporation.
Total income since incorporation $317,000
Total cash dividends paid 60,000
Total value of stock dividends distributed 30,000
Gains on treasury stock transactions 18,000
Unamortized discount on bonds payable 32,000
Instructions
Determine the current balance of retained earnings.
The following information is taken from the accounting records of four different companies. Provide the missing...
The following information is taken from the accounting records
of four different companies. Provide the missing amounts. Assume
there are no indirect materials used in the company’s finished
product.
Company 1
Company 2
Company 3
Company 4
Direct Materials Inventory, beginning
$15,400
$
$6,000
$165,300
Purchases of direct materials
86,400
52,600
258,800
Total direct materials available for use
394,600
111,600
Direct Materials Inventory, ending
26,700
59,350
Direct materials used in production
90,800
Direct labor
212,700
25,500
299,100
Total manufacturing overhead...
The following information is taken from the accounting records of four different companies. Provide the missing...
The following information is taken from the accounting records
of four different companies. Provide the missing amounts. Assume
there are no indirect materials used in the company’s finished
product.
Company 1
Company 2
Company 3
Company 4
Direct Materials Inventory, beginning
$15,900
$
$6,500
$166,000
Purchases of direct materials
86,400
52,600
258,900
Total direct materials available for use
394,900
112,000
Direct Materials Inventory, ending
26,200
59,750
Direct materials used in production
91,100
Direct labor
212,000
25,000
298,500
Total manufacturing overhead...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Consider the following IS-LM model with a banking system: Consumption: C = 7 + 0.6YD Investment:...
- What are the facts involved in Danske Bank's Estonian Branch money laundering activities?
- Please read case and answer the question thank you. In recent years, cyberwar has left the...
- Java Write a menu driven program that implements the following linked list operations : INSERT (at...
- Use the following to answer 5 - 8. Among the four northwestern states, Washington has 51%...
- Evaluate the Enron Fraud and assess the impact of subsequent changes to corporate governance, accounting and...
- A rigid tank contains hydrogen and has a volume of 4.1 ft3. It is initially at...
ADVERTISEMENT