Question
In: Accounting
An accountant has calculated the following ratios for his company for the last three years. (Remember:...
An accountant has calculated the following ratios for his company for the last three years.
(Remember: To convert turnovers into time periods, divide 365 days by the turnover.)
|
2018 |
2019 |
2020 |
|
|
Accounts receivable turnover |
7 |
8 |
9 |
|
Inventory turnover |
3 |
3.5 |
4 |
|
Accounts payable turnover |
4 |
3.5 |
3 |
Required:
i) Calculate the Operating Cash Cycle time for each of the three years.
ii) Comment on the significance of the Operating Cash Cycle for the management.
Solutions
ekkarill92 answered 1 year agoRelated Solutions
An accountant has calculated the following ratios for his company for the last three years. (Remember:...
An accountant has calculated the following ratios for his
company for the last three years.
(Remember: To convert turnovers into time periods, divide 365
days by the turnover.)
2018
2019
2020
Accounts receivable turnover
7
8
9
Inventory turnover
3
3.5
4
Accounts payable turnover
4
3.5
3
Required:
i) Calculate the Operating Cash Cycle time for each of the three
years.
ii) Comment on the significance of the Operating Cash Cycle for
the management
The following ratios have been calculated for MORT Oil and Gas Company for two years 2019-2018....
The following ratios have been
calculated for MORT Oil and Gas Company for two years
2019-2018.
Financial ratios
2019
2018
Leverage
Debt ratio (%)
70.2
68.1
Long-term debt to total capital (%)
60.0
67.5
Debt to equity (times)
3.2
3.1
Times interest earned (times)
2.5
0.9
Cash interest coverage (times)
3.9
2.7
Fixed charge coverage (times)
1.0
0.7
Cash flow adequacy (times)
0.4
1.1
Profitability
Gross profit margin (%)
14.2
11.1
Operating profit margin (%)
2.3
0.8
Net profit margin...
I/S Analysis: The following ratios have been calculated for the SolarMolar Company. Note that SolarMolar has NO...
I/S Analysis: The following ratios
have been calculated for the SolarMolar Company. Note that
SolarMolar has NO DEBT. Given this information and
nothing else, analyze the income statement data and provide your
thoughts regarding TWO changes you may encourage SolarMolar to
consider. (5
pts)
2018 2017 2016
Gross profit
margin 41.9% 42.5% 42.1%
Operating profit
margin 15.7% 21.7% 21.5%
Net profit
margin 11.8% 13.0% 12.9%
B/S Analysis: You are reviewing the balance sheet of
DGD Inc., (a durable goods manufacturer) and you notice a sizeable
amount of “Deferred Taxes Payable” in the long-term liabilities
section...
The following ratios have been calculated for the Solar Tech Company. Analyze the profitability of Solar...
The following ratios have been calculated for the Solar Tech
Company. Analyze the profitability of Solar Tech Company.
2015
2014
Gross profit
margin
37.0% 42.5%
Operating profit
margin
4.7% 21.7%
Net profit margin
1.3%
17.2%
Cash flow
margin
20.4% 25.9%
Which of the following ratios cannot be calculated without the income statement?
Question 5
Which of the following ratios cannot be calculated without the income statement?
Current ratio
Debt to Equity ratio
Quick Ratio
Gross Profit Margin
Question 6
A snapshot of the financial position of a business at a point in time is called the
Balance Sheet
Income Statement
Statement of Retained Earnings
Cashflow Satement
Question 7
Which of the following ratios requires information from both the income statement and balance sheet?
...
1. A company has three new project ideas that are all expected to last 4 years....
1. A company has three new project ideas that are all expected to
last 4 years. Unfortunately due to a resource constraint they can
only pursue 2 of these projects. Assume the development costs for
all projects are paid up front (i.e. prior to the start of the
project). The specific financial projections for the three projects
are:
· Project 1 –
Development cost would be $50,000. Projected revenues from the
project are $50,000 in the first year with an...
Justify and explain the financial performance of the company for each of the calculated financial ratios...
Justify and explain the financial performance of the
company for each of the calculated financial ratios for the FY 2018
& 2019 (taken as average) :
1) AGE OF ACCOUNT RECEIVABLE = 23 DAYS
2) INVENTORY TURNOVER IN DAYS = 42 DAYS
3) CURRENT RATIO = 1.58
4) LIQUID RATIO = 0.56
5) RETURN ON ASSET = 1.93%
6) EQUITY RATIO = 0.55
7) RETURN ON EQUITY = 3.5%
8) NET PROFIT = 1.02%
Please list three different financial ratios and explain how they are calculated. What is the importance...
Please list three different financial ratios and explain how
they are calculated.
What is the importance of those ratios?
The ABC Company has the following demand data (highlighted in green) for the last 2 years...
The ABC Company has the following demand data (highlighted in
green) for the last 2 years of sales for all models of their
popular ToyPop product (in units):
- The company currently has five employees on the ToyPop line, each
capable of producing approximately two ToyPops per day (assume 25
days per month).
- Hiring and layoff are not considered for Year 2018.
- The employees each earn $20 per hour for the standard 8-hour day,
with $10 extra per...
The accountant for a company wants you to check over his work as he has never...
The accountant for a company wants you to check over his work as
he has never compiled a multi-step income statement before. He
provides you with the following partial income statement beginning
with operating expenses (NOT income from continuing
operations):
Net
Sales
$4,500,000
Operating
Expenses
(1,500,000)
Operating
Income
$3,000,000
Depreciation
Expense
(20,000)
Extraordinary loss from tornado, unusual and
infrequent
(750,000)
Cost of Goods
sold
(170,000)
Gain on Translation of foreign
currency
...
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