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Here are simplified financial statements for Phone Corporation in 2020: INCOME STATEMENT (Figures in 5 millions) Net sales Cost of goods sold Other expenses Depreciation Earnings before interest and taxes (EBIT) Interest expense Income before tax Taxes (at 21%) Net income Dividends Assets Cash and marketable securities Receivables Inventories Other current assets BALANCE SHEET (Figures in 5 millions) Total current assets Net property, plant, and equipment Other long-term assets Total assets Liabilities and shareholders' equity Payables Short-term debt Other current liabilities Total current liabilities Long-term debt and leases Other long-term liabilities Shareholders' equity Total liabilities and shareholders' equity a. Return on equity (use average balance sheet figures) b. Return on assets (use average balance sheet figures) c. Return on capital (use average balance sheet figures) d. Days in inventory (use start-of-year balance sheet figures) $ 13,600 4,310 4,162 2,668 $ 2,460 710 $ 1,750 368 $ 1,382 $.906 e. Inventory turnover (use start-of-year balance sheet figures) f. Average collection period (use start-of-year balance sheet figures) g. Operating profit margin h. Long-term debt ratio (use end-of-year balance sheet figures) i. Total debt ratio (use end-of-year balance sheet figures) j. Times interest earned k. Cash coverage ratio 1. Current ratio (use end-of-year balance sheet figures) m. Quick ratio (use end-of-year balance sheet figures) End of Year Start of Year $ 94 2,632 212 892 $ 3,830 20,023 4,266 $ 28,119 $ 2,614 1,444 836 $ 4,894 5,773 6,228 11,224 $ 28,119 Calculate the following financial ratios for Phone Corporation: Note: Use 365 days in a year. Do not round Intermediate calculations. Round your final answers to 2 decimal places. $ 163 2,590 263 957 $ 3,973 19,965 3,820 $ 27,758 $ 3,090 1,598 812 $ 5,5ee 5,938 6,199 10,121 $ 27,758 12.95 % days days

Here are simplified financial statements for Phone Corporation in 2020: INCOME STATEMENT (Figures in 5 millions) Net sales Cost of goods sold Other expenses Depreciation Earnings before interest and taxes (EBIT) Interest expense Income before tax Taxes (at 21%) Net income Dividends Assets Cash and marketable securities Receivables Inventories Other current assets BALANCE SHEET (Figures in 5 millions) Total current assets Net property, plant, and equipment Other long-term assets Total assets Liabilities and shareholders' equity Payables Short-term debt Other current liabilities Total current liabilities Long-term debt and leases Other long-term liabilities Shareholders' equity Total liabilities and shareholders' equity a. Return on equity (use average balance sheet figures) b. Return on assets (use average balance sheet figures) c. Return on capital (use average balance sheet figures) d. Days in inventory (use start-of-year balance sheet figures) $ 13,600 4,310 4,162 2,668 $ 2,460 710 $ 1,750 368 $ 1,382 $.906 e. Inventory turnover (use start-of-year balance sheet figures) f. Average collection period (use start-of-year balance sheet figures) g. Operating profit margin h. Long-term debt ratio (use end-of-year balance sheet figures) i. Total debt ratio (use end-of-year balance sheet figures) j. Times interest earned k. Cash coverage ratio 1. Current ratio (use end-of-year balance sheet figures) m. Quick ratio (use end-of-year balance sheet figures) End of Year Start of Year $ 94 2,632 212 892 $ 3,830 20,023 4,266 $ 28,119 $ 2,614 1,444 836 $ 4,894 5,773 6,228 11,224 $ 28,119 Calculate the following financial ratios for Phone Corporation: Note: Use 365 days in a year. Do not round Intermediate calculations. Round your final answers to 2 decimal places. $ 163 2,590 263 957 $ 3,973 19,965 3,820 $ 27,758 $ 3,090 1,598 812 $ 5,5ee 5,938 6,199 10,121 $ 27,758 12.95 % days days

Managerial Accounting: The Cornerstone of Business Decision-Making
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter15: Financial Statement Analysis
Section: Chapter Questions
Problem 32BEB
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Here are simplified financial statements for Phone Corporation in 2020: Net sales Cost of goods sold Other expenses INCOME STATEMENT (Figures in $ millions) Depreciation Earnings before interest and taxes (EBIT) Interest expense Income before tax Taxes (at 21%) Net income Dividends Assets Cash and marketable securities Receivables Inventories Other current assets BALANCE SHEET (Figures in $ millions) Total current assets Net property, plant, and equipment Other long-term assets. Total assets Liabilities and shareholders' equity Payables Short-term debt Other current liabilities Total current liabilities Long-term debt and leases Other long-term liabilities Shareholders' equity Total liabilities and shareholders' equity $ 13,600 4,310 4,162 2,668 $2,460 718 $1,750 368 a. Return on equity (use average balance sheet figures) b. Return on assets (use average balance sheet figures) c. Return on capital (use average balance sheet figures) d. Days in inventory (use start-of-year balance sheet figures) $ 1,382 $906 j. Times interest earned k. Cash coverage ratio 1. Current ratio (use end-of-year balance sheet figures) m. Quick ratio (use end-of-year balance sheet figures) e. Inventory turnover (use start-of-year balance sheet figures) f. Average collection period (use start-of-year balance sheet figures) g. Operating profit margin h. Long-term debt ratio (use end-of-year balance sheet figures) i. Total debt ratio (use end-of-year balance sheet figures) End of Year $94 2,632 212 892 $ 3,830 20,023 4,266 $ 28,119 $ 2,614 1,444 836 $4,894 5,773 6,228 11,224 $ 28,119 Start of Year $ 163 2,590 263 957 $ 3,973 19,965 3,820 $ 27,758 Calculate the following financial ratlos for Phone Corporation: Note: Use 365 days in a year. Do not round Intermediate calculations. Round your final answers to 2 decimal places. $ 3,090 1,598 812 $ 5,500 5,938 6, 199 10,121 $ 27,758 12.95 % 96 days days 96
Transcribed Image Text:Here are simplified financial statements for Phone Corporation in 2020: Net sales Cost of goods sold Other expenses INCOME STATEMENT (Figures in $ millions) Depreciation Earnings before interest and taxes (EBIT) Interest expense Income before tax Taxes (at 21%) Net income Dividends Assets Cash and marketable securities Receivables Inventories Other current assets BALANCE SHEET (Figures in $ millions) Total current assets Net property, plant, and equipment Other long-term assets. Total assets Liabilities and shareholders' equity Payables Short-term debt Other current liabilities Total current liabilities Long-term debt and leases Other long-term liabilities Shareholders' equity Total liabilities and shareholders' equity $ 13,600 4,310 4,162 2,668 $2,460 718 $1,750 368 a. Return on equity (use average balance sheet figures) b. Return on assets (use average balance sheet figures) c. Return on capital (use average balance sheet figures) d. Days in inventory (use start-of-year balance sheet figures) $ 1,382 $906 j. Times interest earned k. Cash coverage ratio 1. Current ratio (use end-of-year balance sheet figures) m. Quick ratio (use end-of-year balance sheet figures) e. Inventory turnover (use start-of-year balance sheet figures) f. Average collection period (use start-of-year balance sheet figures) g. Operating profit margin h. Long-term debt ratio (use end-of-year balance sheet figures) i. Total debt ratio (use end-of-year balance sheet figures) End of Year $94 2,632 212 892 $ 3,830 20,023 4,266 $ 28,119 $ 2,614 1,444 836 $4,894 5,773 6,228 11,224 $ 28,119 Start of Year $ 163 2,590 263 957 $ 3,973 19,965 3,820 $ 27,758 Calculate the following financial ratlos for Phone Corporation: Note: Use 365 days in a year. Do not round Intermediate calculations. Round your final answers to 2 decimal places. $ 3,090 1,598 812 $ 5,500 5,938 6, 199 10,121 $ 27,758 12.95 % 96 days days 96
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