Question
In: Accounting
Otis Company’s income statement information follows: 2018 2017 Net sales $ 480,000 $ 320,000 Income before...
Otis Company’s income statement information follows:
| 2018 | 2017 | ||||||
| Net sales | $ | 480,000 | $ | 320,000 | |||
| Income before interest and taxes | 120,000 | 98,000 | |||||
| Net income after taxes | 81,000 | 72,000 | |||||
| Interest expense | 9,000 | 8,000 | |||||
| Stockholders’ equity, December 31 (2016: $200,000) | 300,000 | 240,000 | |||||
| Common stock, December 31 | 240,000 | 200,000 | |||||
The average number of shares outstanding was 9,600 for 2018 and 8,000 for 2017.
Required
Compute the following ratios for Otis for 2018 and 2017.
Number of times interest was earned. (Round your answers to 2 decimal places.)
Earnings per share based on the average number of shares outstanding. (Round your answers to 2 decimal places.)
Price-earnings ratio (market prices: 2018, $64 per share; 2017, $78 per share). (Round intermediate calculations and final answers to 2 decimal places.)
Return on average equity. (Round your answers to 2 decimal places. (i.e., .2345 should be entered as 23.45).)
Net margin. (Round your answers to 2 decimal places. (i.e., .2345 should be entered as 23.45).)
Calculate: Interest Earned, Earnings Per Share, Price-earnings Ratio, Return on Equity, Net Margin
Solutions
ekkarill92 answered 9 months agoRelated Solutions
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Joyner Company’s income statement for Year 2 follows: Joyner Company’s Income Statement Sales $ 790,000 Cost...
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Joyner Company’s
Income Statement
Sales
$
790,000
Cost of goods sold
406,000
Gross margin
384,000
Selling and administrative expenses
216,000
Net operating income
168,000
Nonoperating items:
Gain on sale of equipment
6,000
Income before taxes
174,000
Income taxes
52,200
Net income
$
121,800
Its balance sheet amounts at the end of Years 1 and 2 are as
follows:
Joyner Company's
Balance Sheet
Year 2
Year 1
Assets
Cash
$
221,000
$
207,500...
Joyner Company’s income statement for Year 2 follows: Joyner Company’s Income Statement Sales $ 797,000 Cost...
Joyner Company’s income statement for Year 2 follows: Joyner
Company’s Income Statement Sales $ 797,000 Cost of goods sold
411,000 Gross margin 386,000 Selling and administrative expenses
217,000 Net operating income 169,000 Nonoperating items: Gain on
sale of equipment 6,000 Income before taxes 175,000 Income taxes
70,000 Net income $ 105,000 Its balance sheet amounts at the end of
Years 1 and 2 are as follows: Joyner Company's Balance Sheet Year 2
Year 1 Assets Cash $ 195,300 $ 191,500...
The Income Statement for XYZ Company for 2016 and 2017 is as follows: 2017 Sales $4,000,000...
The Income Statement for XYZ Company for 2016 and 2017 is as
follows:
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Sales $4,000,000
Cost of Goods Sold 2,500,000 Gross Profit 1,500,000 Selling
Expense 600,000 Administrative Expense 200,000 Total Operating
Expense 800,000 Income from Operations 700,000 Income Tax Expense
50,000 Net Income 650,000
2016 $3,500,000 2,400,000 1,100,000 700,000 150,000 850,000
250,000 20,000 230,000
Instructions: Using the above comparative horizontal analysis
for ABC Company.
Income Statement 2016 2017 2018 Net sales 1,304,000 1,507,000 1,791,000 Cost of sales 781,000 952,000 1,210,000...
Income Statement
2016
2017
2018
Net sales
1,304,000
1,507,000
1,791,000
Cost of sales
781,000
952,000
1,210,000
Gross profit
523,000
555,000
581,000
Marketing
135,400
149,670
220,245
General administration
151,000
151,200
219,560
Depreciation
35,695
49,805
60,345
EBIT
200,905
204,325
80,850
Interest
45,000
57,000
70,000
EBT
155,905
147,325
10,850
Income tax
48,331
45,671
3,364
Net income
107,574
101,654
7,487
Balance Sheet
2016
2017
2018
Cash
55,000
43,500
11,000
Accounts receivable
220,000
261,000
376,337
Inventories
388,124
437,139
545,000
Prepaid insurance
25,000
28,000
28,500
Total...
Comparative balance sheets for 2018 and 2017, a statement of income for 2018, and additional information...
Comparative balance sheets for 2018 and 2017, a statement of
income for 2018, and additional information from the accounting
records of Red, Inc., are provided below.
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Comparative Balance Sheets
December 31, 2018 and 2017 ($ in millions)
2018
2017
Assets
Cash
$
44
$
152
Accounts receivable
198
152
Prepaid insurance
12
5
Inventory
325
195
Buildings and equipment
440
370
Less: Accumulated depreciation
(139
)
(260
)
$
880
$
614
Liabilities
Accounts payable
$
107
$...
Comparative balance sheets for 2018 and 2017, a statement of income for 2018, and additional information...
Comparative balance sheets for 2018 and 2017, a statement of
income for 2018, and additional information from the accounting
records of Red, Inc., are provided below.
RED, INC.
Comparative Balance Sheets
December 31, 2018 and 2017 ($ in millions)
2018
2017
Assets
Cash
$
25
$
112
Accounts
receivable
180
133
Prepaid
insurance
8
4
Inventory
287
176
Buildings and
equipment
402
351
Less:
Accumulated depreciation
(120
)
(241
)
$
782
$
535
Liabilities
Accounts
payable
$
88
$...
Comparative balance sheets for 2018 and 2017, a statement of income for 2018, and additional information...
Comparative balance sheets for 2018 and 2017, a statement of
income for 2018, and additional information from the accounting
records of Red, Inc., are provided below.
RED, INC.
Comparative Balance Sheets
December 31, 2018 and 2017 ($ in millions)
2018
2017
Assets
Cash
$
24
$
110
Accounts
receivable
178
132
Prepaid
insurance
7
3
Inventory
285
175
Buildings and
equipment
400
350
Less:
Accumulated depreciation
(119
)
(240
)
$
775
$
530
Liabilities
Accounts
payable
$
87
$...
Comparative balance sheets for 2018 and 2017, a statement of income for 2018, and additional information...
Comparative balance sheets for 2018 and 2017, a statement of
income for 2018, and additional information from the accounting
records of Red, Inc., are provided below.
RED, INC.
Comparative Balance Sheets
December 31, 2018 and 2017 ($ in millions)
2018
2017
Assets
Cash
$
44
$
152
Accounts receivable
198
152
Prepaid insurance
12
5
Inventory
325
195
Buildings and equipment
440
370
Less: Accumulated
depreciation
(139
)
(260
)
$
880
$
614
Liabilities
Accounts payable
$
107
$...
Comparative balance sheets for 2018 and 2017, a statement of income for 2018, and additional information...
Comparative balance sheets for 2018 and 2017, a statement of
income for 2018, and additional information from the accounting
records of Red, Inc., are provided below.
RED, INC.
Comparative Balance Sheets
December 31, 2018 and 2017 ($ in millions)
2018
2017
Assets
Cash
$
43
$
138
Accounts receivable
196
151
Prepaid insurance
9
4
Inventory
302
194
Buildings and equipment
438
369
Less: Accumulated
depreciation
(138
)
(259
)
$
850
$
597
Liabilities
Accounts payable
$
106
$...
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