Question

In: Finance

Data for Lozano Chip Company and its industry averages follow. Lozano Chip Company: Balance Sheet as...

Data for Lozano Chip Company and its industry averages follow.

Lozano Chip Company: Balance Sheet as of December 31, 2019
(Thousands of Dollars)
Cash $   210,000 Accounts payable $   600,000
Receivables 1,575,000 Notes payable 100,000
Inventories 1,155,000 Other current liabilities 530,000
  Total current assets $2,940,000   Total current liabilities $1,230,000
Net fixed assets 1,320,000 Long-term debt 400,000
Common equity 2,630,000
Total assets $4,260,000 Total liabilities and equity $4,260,000
Lozano Chip Company: Income Statement for Year Ended December 31, 2019
(Thousands of Dollars)
Sales $7,500,000
Cost of goods sold 6,375,000
Selling, general, and administrative expenses 943,000
  Earnings before interest and taxes (EBIT) $   182,000
Interest expense 40,000
  Earnings before taxes (EBT) $   142,000
Federal and state income taxes (25%) 35,500
Net income $   106,500
  1. Calculate the indicated ratios for Lozano. Do not round intermediate calculations. Round your answers to two decimal places.
    Ratio Lozano Industry Average
    Current assets/Current liabilities 2.0
    Days sales outstanding (365-day year)   days 35.0 days
    COGS/Inventory 6.7
    Sales/Fixed assets 12.1
    Sales/Total assets 3.0
    Net income/Sales   % 1.2 %
    Net income/Total assets   % 3.6 %
    Net income/Common equity   % 9.0 %
    Total debt/Total assets   % 10.0 %
    Total liabilities/Total assets   % 60.0 %
  2. Use the extended DuPont equation to calculate ROE for both Lozano and the industry. Do not round intermediate calculations. Round your answers to two decimal places.

    For the firm, ROE is   %.

    For the industry, ROE is   %.

Solutions

Expert Solution

please give a like if you are satisfied with my solution thank you


Related Solutions

Data for Lozano Chip Company and its industry averages follow. Lozano Chip Company: Balance Sheet as...
Data for Lozano Chip Company and its industry averages follow. Lozano Chip Company: Balance Sheet as of December 31, 2019 (Thousands of Dollars) Cash $   210,000 Accounts payable $   600,000 Receivables 1,575,000 Notes payable 100,000 Inventories 1,130,000 Other current liabilities 535,000   Total current assets $2,915,000   Total current liabilities $1,235,000 Net fixed assets 1,335,000 Long-term debt 400,000 Common equity 2,615,000 Total assets $4,250,000 Total liabilities and equity $4,250,000 Lozano Chip Company: Income Statement for Year Ended December 31, 2019 (Thousands of Dollars) Sales...
Data for Lozano Chip Company and its industry averages follow. Lozano Chip Company: Balance Sheet as...
Data for Lozano Chip Company and its industry averages follow. Lozano Chip Company: Balance Sheet as of December 31, 2019 (Thousands of Dollars) Cash $   215,000 Accounts payable $   600,000 Receivables 1,575,000 Notes payable 100,000 Inventories 1,115,000 Other current liabilities 550,000   Total current assets $2,905,000   Total current liabilities $1,250,000 Net fixed assets 1,360,000 Long-term debt 400,000 Common equity 2,615,000 Total assets $4,265,000 Total liabilities and equity $4,265,000 Lozano Chip Company: Income Statement for Year Ended December 31, 2019 (Thousands of Dollars) Sales...
Data for Lozano Chip Company and its industry averages follow. Lozano Chip Company: Balance Sheet as...
Data for Lozano Chip Company and its industry averages follow. Lozano Chip Company: Balance Sheet as of December 31, 2018 (Thousands of Dollars) Cash   $ 235,000      Accounts payable   $ 601,866 Receivables   1,575,000      Notes payable   326,634 Inventories   1,125,000      Other current liabilities   535,000 Total current assets   $2,935,000      Total current liabilities   $1,463,500 Net fixed assets   1,335,000      Long-term debt   1,068,750           Common equity   1,737,750 Total assets   $4,270,000      Total liabilities and equity   $4,270,000 Lozano Chip Company: Income...
Comprehensive Ratio Analysis Data for Lozano Chip Company and its industry averages follow. Lozano Chip Company:...
Comprehensive Ratio Analysis Data for Lozano Chip Company and its industry averages follow. Lozano Chip Company: Balance Sheet as of December 31, 2018 (Thousands of Dollars) Cash $   215,000 Accounts payable $   601,866 Receivables 1,575,000 Notes payable 326,634 Inventories 1,145,000 Other current liabilities 525,000   Total current assets $2,935,000   Total current liabilities $1,453,500 Net fixed assets 1,340,000 Long-term debt 1,068,750 Common equity 1,752,750 Total assets $4,275,000 Total liabilities and equity $4,275,000 Lozano Chip Company: Income Statement for Year Ended December 31, 2018 (Thousands...
Comprehensive Ratio Analysis Data for Lozano Chip Company and its industry averages follow. Lozano Chip Company:...
Comprehensive Ratio Analysis Data for Lozano Chip Company and its industry averages follow. Lozano Chip Company: Balance Sheet as of December 31, 2018 (Thousands of Dollars) Cash $ 215,000 Accounts payable $ 601,866 Receivables 1,575,000 Notes payable 326,634 Inventories 1,150,000 Other current liabilities 532,000 Total current assets $2,940,000 Total current liabilities $1,460,500 Net fixed assets 1,325,000 Long-term debt 1,068,750 Common equity 1,735,750 Total assets $4,265,000 Total liabilities and equity $4,265,000 Lozano Chip Company: Income Statement for Year Ended December 31,...
Comprehensive Ratio Analysis Data for Lozano Chip Company and its industry averages follow. Lozano Chip Company:...
Comprehensive Ratio Analysis Data for Lozano Chip Company and its industry averages follow. Lozano Chip Company: Balance Sheet as of December 31, 2018 (Thousands of Dollars) Cash $   225,000 Accounts payable $   601,866 Receivables 1,575,000 Notes payable 326,634 Inventories 1,130,000 Other current liabilities 527,000   Total current assets $2,930,000   Total current liabilities $1,455,500 Net fixed assets 1,325,000 Long-term debt 1,068,750 Common equity 1,730,750 Total assets $4,255,000 Total liabilities and equity $4,255,000 Lozano Chip Company: Income Statement for Year Ended December 31, 2018 (Thousands...
Comprehensive Ratio Analysis Data for Lozano Chip Company and its industry averages follow. Lozano Chip Company:...
Comprehensive Ratio Analysis Data for Lozano Chip Company and its industry averages follow. Lozano Chip Company: Balance Sheet as of December 31, 2019 (Thousands of Dollars) Cash $   225,000 Accounts payable $   600,000 Receivables 1,575,000 Notes payable 100,000 Inventories 1,125,000 Other current liabilities 520,000   Total current assets $2,925,000   Total current liabilities $1,220,000 Net fixed assets 1,325,000 Long-term debt 400,000 Common equity 2,630,000 Total assets $4,250,000 Total liabilities and equity $4,250,000 Lozano Chip Company: Income Statement for Year Ended December 31, 2019 (Thousands...
Comprehensive Ratio Analysis Data for Lozano Chip Company and its industry averages follow. Lozano Chip Company:...
Comprehensive Ratio Analysis Data for Lozano Chip Company and its industry averages follow. Lozano Chip Company: Balance Sheet as of December 31, 2019 (Thousands of Dollars) Cash $   220,000 Accounts payable $   600,000 Receivables 1,575,000 Notes payable 100,000 Inventories 1,145,000 Other current liabilities 520,000   Total current assets $2,940,000   Total current liabilities $1,220,000 Net fixed assets 1,340,000 Long-term debt 400,000 Common equity 2,660,000 Total assets $4,280,000 Total liabilities and equity $4,280,000 Lozano Chip Company: Income Statement for Year Ended December 31, 2019 (Thousands...
Comprehensive Ratio Analysis Data for Lozano Chip Company and its industry averages follow. Lozano Chip Company:...
Comprehensive Ratio Analysis Data for Lozano Chip Company and its industry averages follow. Lozano Chip Company: Balance Sheet as of December 31, 2018 (Thousands of Dollars) Cash $   230,000 Accounts payable $   601,866 Receivables 1,575,000 Notes payable 326,634 Inventories 1,125,000 Other current liabilities 539,000   Total current assets $2,930,000   Total current liabilities $1,467,500 Net fixed assets 1,350,000 Long-term debt 1,068,750 Common equity 1,743,750 Total assets $4,280,000 Total liabilities and equity $4,280,000 Lozano Chip Company: Income Statement for Year Ended December 31, 2018 (Thousands...
Comprehensive Ratio Analysis Data for Lozano Chip Company and its industry averages follow. Lozano Chip Company:...
Comprehensive Ratio Analysis Data for Lozano Chip Company and its industry averages follow. Lozano Chip Company: Balance Sheet as of December 31, 2018 (Thousands of Dollars) Cash $   225,000 Accounts payable $   601,866 Receivables 1,575,000 Notes payable 326,634 Inventories 1,150,000 Other current liabilities 539,000   Total current assets $2,950,000   Total current liabilities $1,467,500 Net fixed assets 1,325,000 Long-term debt 1,068,750 Common equity 1,738,750 Total assets $4,275,000 Total liabilities and equity $4,275,000 Lozano Chip Company: Income Statement for Year Ended December 31, 2018 (Thousands...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT