Question
In: Accounting
Bob Evans Corporation’s financial statements ($ millions) … Income Statement Summary 2016 2017 Sales $1,799 $2,010...
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Bob Evans Corporation’s financial statements ($ millions) … Income Statement Summary |
|||||
|
2016 |
2017 |
||||
|
Sales |
$1,799 |
$2,010 |
|||
|
Earnings before interest & taxes |
|||||
|
(EBIT) |
$221 |
$304 |
|||
|
Interest expense (net) |
(7) |
(12) |
|||
|
Income before taxes |
$214 |
$292 |
|||
|
Income Taxes |
(79) |
(99) |
|||
|
Tax Rate |
37% |
34% |
|||
|
Net income |
$135 |
$193 |
|||
|
Common shares outstanding |
|||||
|
(millions) |
38 |
38 |
|||
|
Balance Sheet Summary |
|||||
|
2015 |
2016 |
2017 |
|||
|
Current assets |
$504 |
$536 |
$654 |
||
|
Timberland assets |
513 |
508 |
513 |
||
|
Property, plant & equipment |
681 |
718 |
827 |
||
|
Other assets |
151 |
34 |
38 |
||
|
Total assets |
$1,849 |
$1,796 |
$2,032 |
||
|
Current liabilities |
$176 |
$162 |
$180 |
||
|
Long-term debt |
493 |
370 |
530 |
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|
Deferred taxes & other |
136 |
127 |
146 |
||
|
Equity |
1,044 |
1,137 |
1,176 |
||
|
Total liabilities & equity |
$1,849 |
$1,796 |
$2,032 |
||
The change in Bob Evans operational performance from 2016 to 2017 was due mainly to ______________________.
-
profit margin (ROS)
-
asset turnover ratio (ATO)
-
interest burden ratio
-
tax burden ratio
*2. Bob Evan's return on assets (ROA) was ____ in 2016 and ______ in 2017.
-
.123, .151
-
.124, .167
-
.121, .159
-
1.62, 1.59
*3. The use of debt (leverage) had _________ affect on Bob Evan's financial performance in 2017 versus 2016.
a) a positive
b) a negative
c) no
d) a mixed
Solutions
Expert Solution
The change in Bob Evans operational performance from 2016 to 2017 was due mainly to __________Profit Margin ____________.
-
profit margin (ROS) = Net Income/Net Sales =
-
2016 2017 135/1799 = 7.50% 193/2010=9.60% -
asset turnover ratio (ATO) = Net Sales / Average Total Assets
-
2016 1799/(1849+1796)/2=0.99 2017 2010/(1796+2032)/2=1.05 -
interest burden ratio = EBIT/Interest
-
2016 2017 221/7 =31.57 304/12=25.93 -
tax burden ratio = EBIT/Tax
-
2016 2017 221/79 =2.80 304/99=3.07
Answer 2 ROA = Net Income / Average Total Assets
| 2016 | 2017 | |
| 135/(1849+1796)/2=7.41 | 193/(1796+2032)/2=10.08 | |
Answer 3 The use of debt (leverage) had _positive________ affect on Bob Evan's financial performance in 2017 versus 2016.
Debt Equity Ratio = Liabilities/ Equity
| 2016 | 2017 |
| 1796-1137=659/1137=0.58 | 2032-1176=856/1176=0.73 |
ekkarill92 answered 1 year agoRelated Solutions
The 2017 financial statements for Growth Industries are presented below. INCOME STATEMENT, 2017 Sales $ 350,000...
The 2017 financial statements for Growth Industries are
presented below.
INCOME STATEMENT, 2017
Sales
$
350,000
Costs
225,000
EBIT
$
125,000
Interest
expense
25,000
Taxable
income
$
100,000
Taxes (at
35%)
35,000
Net income
$
65,000
Dividends
$
26,000
Addition to
retained earnings
39,000
BALANCE SHEET, YEAR-END, 2017
Assets
Liabilities
Current
assets
Current
liabilities
Cash
$
4,000
Accounts
payable
$
11,000
Accounts
receivable
9,000
Total current
liabilities
$
11,000
Inventories
27,000
Long-term
debt
250,000
Total current
assets
$
40,000...
The 2017 financial statements for Growth Industries are presented below. INCOME STATEMENT, 2017 Sales $ 390,000...
The 2017 financial statements for Growth Industries are
presented below. INCOME STATEMENT, 2017 Sales $ 390,000 Costs
245,000 EBIT $ 145,000 Interest expense 29,000 Taxable income $
116,000 Taxes (at 35%) 40,600 Net income $ 75,400 Dividends $
30,160 Addition to retained earnings 45,240 BALANCE SHEET,
YEAR-END, 2017 Assets Liabilities Current assets Current
liabilities Cash $ 8,000 Accounts payable $ 15,000 Accounts
receivable 13,000 Total current liabilities $ 15,000 Inventories
29,000 Long-term debt 290,000 Total current assets $ 50,000
Stockholders’...
The 2017 financial statements for Growth Industries are presented below. INCOME STATEMENT, 2017 Sales $ 350,000...
The 2017 financial statements for Growth Industries are
presented below.
INCOME STATEMENT, 2017
Sales
$
350,000
Costs
225,000
EBIT
$
125,000
Interest expense
25,000
Taxable income
$
100,000
Taxes (at 35%)
35,000
Net income
$
65,000
Dividends
$
26,000
Addition to retained earnings
39,000
BALANCE SHEET, YEAR-END, 2017
Assets
Liabilities
Current assets
Current liabilities
Cash
$
4,000
Accounts payable
$
11,000
Accounts receivable
9,000
Total current liabilities
$
11,000
Inventories
27,000
Long-term debt
250,000
Total current assets
$
40,000...
The 2017 financial statements for Growth Industries are presented below. INCOME STATEMENT, 2017 Sales $ 290,000...
The 2017 financial statements for Growth Industries are
presented below. INCOME STATEMENT, 2017 Sales $ 290,000 Costs
195,000 EBIT $ 95,000 Interest expense 19,000 Taxable income $
76,000 Taxes (at 35%) 26,600 Net income $ 49,400 Dividends $ 29,640
Addition to retained earnings 19,760 BALANCE SHEET, YEAR-END, 2017
Assets Liabilities Current assets Current liabilities Cash $ 5,000
Accounts payable $ 12,000 Accounts receivable 10,000 Total current
liabilities $ 12,000 Inventories 25,000 Long-term debt 190,000
Total current assets $ 40,000 Stockholders’...
The 2017 financial statements for Growth Industries are presented below. INCOME STATEMENT, 2017 Sales $ 240,000...
The 2017 financial statements for Growth Industries are
presented below. INCOME STATEMENT, 2017 Sales $ 240,000 Costs
170,000 EBIT $ 70,000 Interest expense 14,000 Taxable income $
56,000 Taxes (at 35%) 19,600 Net income $ 36,400 Dividends $ 18,200
Addition to retained earnings 18,200 BALANCE SHEET, YEAR-END, 2017
Assets Liabilities Current assets Current liabilities Cash $ 7,000
Accounts payable $ 14,000 Accounts receivable 12,000 Total current
liabilities $ 14,000 Inventories 21,000 Long-term debt 140,000
Total current assets $ 40,000 Stockholders’...
The 2017 financial statements for Growth Industries are presented below. INCOME STATEMENT, 2017 Sales $ 240,000...
The 2017 financial statements for Growth Industries are
presented below.
INCOME STATEMENT, 2017
Sales
$
240,000
Costs
170,000
EBIT
$
70,000
Interest
expense
14,000
Taxable
income
$
56,000
Taxes (at
35%)
19,600
Net income
$
36,400
Dividends
$
18,200
Addition to
retained earnings
18,200
BALANCE SHEET, YEAR-END, 2017
Assets
Liabilities
Current
assets
Current
liabilities
Cash
$
7,000
Accounts
payable
$
14,000
Accounts
receivable
12,000
Total current
liabilities
$
14,000
Inventories
21,000
Long-term
debt
140,000
Total current
assets
$
40,000...
The 2017 financial statements for Growth Industries are presented below. INCOME STATEMENT, 2017 Sales $ 240,000...
The 2017 financial statements for Growth Industries are
presented below.
INCOME STATEMENT, 2017
Sales
$
240,000
Costs
170,000
EBIT
$
70,000
Interest
expense
14,000
Taxable
income
$
56,000
Taxes (at
35%)
19,600
Net income
$
36,400
Dividends
$
18,200
Addition to
retained earnings
18,200
BALANCE SHEET, YEAR-END, 2017
Assets
Liabilities
Current
assets
Current
liabilities
Cash
$
7,000
Accounts
payable
$
14,000
Accounts
receivable
12,000
Total current
liabilities
$
14,000
Inventories
21,000
Long-term
debt
140,000
Total current
assets
$
40,000...
The 2017 financial statements for Growth Industries are presented below. INCOME STATEMENT, 2017 Sales $ 310,000...
The 2017 financial statements for Growth Industries are
presented below.
INCOME STATEMENT, 2017
Sales $ 310,000
Costs 205,000
EBIT $ 105,000
Interest expense 21,000
Taxable income $ 84,000
Taxes (at 35%) 29,400
Net income $ 54,600
Dividends $ 21,840
Addition to retained earnings 32,760
BALANCE SHEET, YEAR-END, 2017
Assets
Current assets
cash 7,000
accounts receivable 12,000
inventories 31,000
total current assets 50,000
net plant and equipments 250,000
total assets 300,000
liabilities
current liabilities
accounts payable 14,000
total current liabilities 14,000...
The 2017 financial statements for Growth Industries are presented below. INCOME STATEMENT, 2017 Sales $ 370,000...
The 2017 financial statements for Growth Industries are
presented below.
INCOME STATEMENT, 2017
Sales
$
370,000
Costs
235,000
EBIT
$
135,000
Interest
expense
27,000
Taxable
income
$
108,000
Taxes (at
35%)
37,800
Net income
$
70,200
Dividends
$
42,120
Addition to
retained earnings
28,080
BALANCE SHEET, YEAR-END, 2017
Assets
Liabilities
Current
assets
Current
liabilities
Cash
$
6,000
Accounts
payable
$
13,000
Accounts
receivable
11,000
Total current
liabilities
$
13,000
Inventories
33,000
Long-term
debt
270,000
Total current
assets
$
50,000...
Here are simplified financial statements for Watervan Corporation: INCOME STATEMENT (Figures in $ millions) Net sales...
Here are simplified financial statements for Watervan
Corporation:
INCOME
STATEMENT
(Figures in $
millions)
Net sales
$
895.00
Cost of goods sold
755.00
Depreciation
45.00
Earnings before interest and taxes (EBIT)
$
95.00
Interest expense
26.00
Income before tax
$
69.00
Taxes
14.49
Net income
$
54.51
BALANCE SHEET
(Figures in $ millions)
End of Year
Start of Year
Assets
Current assets
$
383
$
340
Long-term assets
286
236
Total assets
$
669
$
576
Liabilities and shareholders’ equity...
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