Typically, salaries do not increase or increase very little from year to year; however, the prices of things are steadily increasing (which is often quite a pain) Why do you think this happens? How do we deal with this? Do you you have any thoughts on how we could correct this? Do you have any personal examples you can provide regarding this
In: Economics
Calculate the ratios for year 2 that are listed below:
COMPANY XYZ
Income Sheet
|
Year 1 |
Year 2 |
||
|
Sales (all on credit) |
$1,400,000 |
$1,375,000 |
|
|
Cost of Goods sold |
850,000 |
900,000 |
|
|
Gross profit |
$550,000 |
$475,000 |
|
|
Selling and administrative expense* |
240,000 |
230,000 |
|
|
Operating profit (EBIT) |
$310,000 |
245,000 |
|
|
Interest expense |
40,000 |
37,000 |
|
|
Net income before taxes |
$270,000 |
208,000 |
|
|
Taxes |
81,000 |
62,400 |
|
|
Net income |
$189,000 |
145,600 |
|
|
Shares |
30,000 |
30,001 |
|
|
Earnings per share |
$6.30 |
$4.85 |
|
|
*Includes $15,000 in lease payments for each year. |
|||
COMPANY XYZ
|
Balance Sheet Assets |
Year 1 |
Year 2 |
|
Cash |
$50,000 |
$55,000 |
|
Marketable securities |
20,000 |
20,000 |
|
Accounts receivable |
150,000 |
150,000 |
|
Inventory |
200,000 |
210,000 |
|
Total current assets |
$420,000 |
435,000 |
|
Net plant and equipment |
650,000 |
650,000 |
|
Total assets |
$1,070,000 |
$1,085,000 |
|
Liabilities and Stockholders’ Equity |
||
|
Accounts payable |
$175,000 |
190,000 |
|
Accrued expenses |
25,000 |
25,000 |
|
Total current liabilities |
$200,000 |
215,000 |
|
Long-term liabilities |
310,000 |
310,000 |
|
Total liabilities |
$510,000 |
525,000 |
|
Common stock ($2 par) |
60,000 |
60,000 |
|
Capital paid in excess of par |
190,000 |
190,000 |
|
Retained earnings |
310,000 |
310,000 |
|
Total stockholders’ equity |
$560,000 |
560,000 |
|
Total liabilities and stockholders’ equity |
$1,070,000 |
$1,085,000 |
Create your response to this:
| Ratio Description | Ratio |
Formula - showing numbers (labels) 435,000 (Current Assets)/215,000 (Current Liabilities) |
|
Current Ratio |
||
| Quick Ratio (Acid Test Ratio) | ||
| Days Sales Outstanding (Average Collection Period) | ||
| Inventory Turnover | ||
| Fixed Asset Turnover | ||
| Total Asset Turnover | ||
| Debt Ratio | ||
| Times Interest Earned | ||
| Gross Profit Margin | ||
| Net Profit Margin | ||
| Return on Assets | ||
| Return on Equity |
In: Accounting
An investment offers $5,500 per year for 15 years, with the first payment occurring one year from today.
If the required return is 6%, what is the present value of the investment?
In: Finance
The following transactions were completed by Winklevoss Inc., whose fiscal year is the calendar year:
| 2016 | ||
| July | 1 | Issued $71,100,000 of 20-year, 12% callable bonds dated July 1, 2016, at a market (effective) rate of 14%, receiving cash of $61,621,133. Interest is payable semiannually on December 31 and June 30. |
| Oct. | 1 | Borrowed $250,000 by issuing a six-year, 5% installment note to Nicks Bank. The note requires annual payments of $49,254, with the first payment occurring on September 30, 2017. |
| Dec. | 31 | Accrued $3,125 of interest on the installment note. The interest is payable on the date of the next installment note payment. |
| 31 | Paid the semiannual interest on the bonds. The bond discount amortization of $236,972 is combined with the semiannual interest payment. | |
| 31 | Closed the interest expense account. | |
| 2017 | ||
| June | 30 | Paid the semiannual interest on the bonds. The bond discount amortization of $236,972 is combined with the semiannual interest payment. |
| Sept. | 30 | Paid the annual payment on the note, which consisted of interest of $12,500 and principal of $36,754. |
| Dec. | 31 | Accrued $2,666 of interest on the installment note. The interest is payable on the date of the next installment note payment. |
| 31 | Paid the semiannual interest on the bonds. The bond discount amortization of $236,972 is combined with the semiannual interest payment. | |
| 31 | Closed the interest expense account. | |
| 2018 | ||
| June | 30 | Recorded the redemption of the bonds, which were called at 98. The balance in the bond discount account is $8,530,979 after payment of interest and amortization of discount have been recorded. (Record the redemption only.) |
| Sept. | 30 | Paid the second annual payment on the note, which consisted of interest of $10,662 and principal of $38,592. |
Required:
| 1. | Journalize the entries to record the foregoing transactions. Round all amounts to the nearest dollar. Be sure to include the year in the date for the entries. Refer to the Chart of Accounts for exact wording of account titles. |
| 2. | Indicate the amount of the interest expense in (a) 2016 and (b) 2017. |
| 3. | Determine the carrying amount of the bonds as of December 31, 2017. |
In: Accounting
How much interest will you pay during the eighth year of a 25-year $350,000 loan with an APR of 5.5% if you only make the minimum monthly payments?
A. $17,293
B. $15,941
C. $16,139
D. $28,989
In: Finance
Suppose most investors expect the inflation rate to be 5% next year, 6% the following year, and 8% thereafter. The real-risk free rate is 3%. The maturity risk premium is zero for bonds that mature in 1 year or less and 0.1% for 2-year bonds; then the MPR increased by 0.1% per year thereafter for 20 years, after which it is stable. What is the interest rate on 1-, 10-, and 20- year treasury bonds? Draw a yield curve with these data. What factors can explain why this constructed yield curve is upward sloping?
In: Finance
The fiscal year 2011 balance sheet (i.e., the year ended on January 29th, 2011) indicates that shareholders’ equity is $0.6143 billion. Compare this amount to the Leonard Green & Partners’ offer to Jo-Ann’s shareholders of $1.6 billion, and to $1.19 billion, which was the pre-offer value of Jo-Ann’s stock. There seems to be some disparity between the stock market’s evaluation and the balance sheet representation of Jo-Ann’s equity. Why are the two versions of the value of the firm’s equity different?
In: Finance
A project has fixed costs of $1,500 per year, depreciation charges of $500 a year, annual revenue of $9,000, and variable costs equal to two-thirds of revenues.
a. If sales increase by 13%, what will be the percentage increase in pretax profits? (Round to 2 decimal places)
b. What is the degree of operating leverage of this project? (round to 2 decimal places)
In: Finance
Revenue and expense data for Bluestem Company are as follows:
Year 2 Year 1
administrative expenses 37,720 20,300
COGS 360,000 319,900
Income tax 41,000 32,200
Sales 820,000 700,000
Selling expense 154,160 109,900
1) Required: (a) Prepare a comparative income statement, with vertical analysis, stating each item for both years as a percent of sales. Round your percentages to one decimal place. Enter all amounts as positive numbers. Refer to the Accounts and Amount Descriptions for correct wording of text entries. (b) Comment upon significant changes disclosed by the comparative income statement.
2) Comment upon significant changes disclosed by the comparative income statement.
There was an (increase/decrease) the cost of goods sold and a 1.7% (increase/decrease) in administrative expenses. However, the more significant of 3.1% in selling expenses offset the 1.8% (increase/decrease) in the cost of goods sold and contributed greatly to the 3.4% (increase/decrease) in net income.
In: Accounting
A person deposits $12,000 per year for 5 years, with the first deposit made one year from the present. One year after the last deposit, the person makes continuous withdrawals of $2,000 for the next 15 years. Find the effective annual ERR being earned on this investment.
Thank you very much to whomever can give me the solution and answer! ?
In: Economics