Financial statement analysis The financial statements of Zach Industries for the year ended December 31, 2019, follow .a. Use the financial statements to complete the following table E. Assume the industry averages given in the table are applicable for both 2018 and 2019.b. Analyze Zach Industries' financial condition as it is related to (1) liquidity, (2) activity, (3) debt, (4) profitability, and (5) market. Summarize the company's overall financial condition......a. The current ratio is 1.04. (Round to two decimal places.)The quick ratio is .38. (Round to two decimal places.)The inventory turnover is 2.32. (Round to two decimal places.)The average collection period is 56.1 days. (Round to one decimal place.)The debt ratio is 61.7 %. (Round to one decimal place.)The times interest earned ratio is|. (Round to one decimal place.) Zach Industries Income Statementfor the Year Ended December, 31, 2019Sales revenue$160,100Less: Cost of goods sold105,500Gross profits$54,600Less: Operating expensesSelling expense$15,900General and administrative expenses9,700Lease expense1,040Depreciation expense9,600Total operating expense$36,240Operating profits$18,360Less: Interest expense5,900Net profits before taxes$12,460Less: Taxes4,390Net profits after taxes$8,070(Click the icon herein order to copy the contents of the data table below into a spreadsheet.)Zach Industries Balance SheetDecember 31, 2019AssetsCash$530Marketable securities1,010Accounts receivable24,600Inventories45,400Total current assets$71,540Land$26,200Buildings and equipmentLess: Accumulated depreciationNet fixed assets89,60038,500$77,300Total assets$148,840(Click the icon herein order to copy the contents of the data table below into a spreadsheet.)Liabilities and Stockholders' EquityAccounts payableNotes payable$22,10046,900Total current liabilities$69,000Long-term debt$22,900Common stock*$31,900Retained earnings$25,040Total liabilities and stockholders' equity$148,840*The firm's 3,500 outstanding shares of common stock closed2019at a price of $23 per share.

In order to determine the time's interest earned ratio, the Earning before interest and taxed (EBIT)…

Financial statement analysis The financial statements of Zach Industries for the year ended December 31, 2019, follow E. a. Use the financial statements to complete the following table E. Assume the industry averages given in the table are applicable for both 2018 and 2019. b. Analyze Zach Industries' financial condition as it is related to (1) liquidity, (2) activity, (3) debt, (4) profitability, and (5) market. Summarize the company's overall financial condition. a. The current ratio is 1.04. (Round to two decimal places.) The quick ratio is .38. (Round to two decimal places.) The inventory turnover is 2.32. (Round to two decimal places.) The average collection period is 56.1 days. (Round to one decimal place.) The debt ratio is 61.7 %. (Round to one decimal place.) The times interest earned ratio is (Round to one decimal place.)

Financial statement analysis The financial statements of Zach Industries for the year ended December 31, 2019, follow E. a. Use the financial statements to complete the following table E. Assume the industry averages given in the table are applicable for both 2018 and 2019. b. Analyze Zach Industries' financial condition as it is related to (1) liquidity, (2) activity, (3) debt, (4) profitability, and (5) market. Summarize the company's overall financial condition. a. The current ratio is 1.04. (Round to two decimal places.) The quick ratio is .38. (Round to two decimal places.) The inventory turnover is 2.32. (Round to two decimal places.) The average collection period is 56.1 days. (Round to one decimal place.) The debt ratio is 61.7 %. (Round to one decimal place.) The times interest earned ratio is (Round to one decimal place.)

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter12: Fainancial Statement Analysis

Section: Chapter Questions

Problem 92PSA: A Preparation of Ratios Refer to the financial statements for Burch Industries in Problem 12-89A and...

See similar textbooks

Similar questions

The following select account data is taken from the records of Reese Industries for 2019. A. Use the data provided to compute net sales for 2019. B. Prepare a simple income statement for the year ended December 31, 2019. C. Compute the gross margin for 2019. D. Prepare a multi-step income statement for the year ended December 31, 2019.
Using the following select financial statement information from Black Water Industries, compute the accounts receivable turnover ratios for 2018 and 2019 (round answers to two decimal places). What do the outcomes tell a potential investor about Black Water Industries?
Debt Management and Short-Term Liquidity Ratios The following items appear on the balance sheet of Figgins Company at the end of 2018 and 2019: Required: Between 2018 and 2019, indicate whether Figgins debt to equity ratio increased or decreased. Also, indicate whether Figgins current ratio increased or decreased. Interpret these ratios.
Data for Lozano Chip Company and its industry averages follow. Calculate the indicated ratios for Lozano. Construct the extended DuPont equation for both Lozano and the industry. Outline Lozano’s strengths and weaknesses as revealed by your analysis. Lozano Chip Company: Balance Sheet as of December 31, 2019 (Thousands of Dollars) Lozano Chip Company: Income Statement for Year Ended December 31, 2019 (Thousands of Dollars)
A Preparation of Ratios Refer to the financial statements for Burch Industries in Problem 12-89A and the following data. Required: 1. Prepare all the financial ratios for Burch for 2019 and 2018 (using percentage terms where appropriate and rounding all answers to two decimal places). 2. CONCEPTUAL CONNECTION Explain whether Burchs short-term liquidity is adequate. 3. CONCEPTUAL CONNECTION Discuss whether Burch uses its assets efficiently. 4. CONCEPTUAL CONNECTION Determine whether Burch is profitable. 5. CONCEPTUAL CONNECTION Discuss whether long-term creditors should regard Burch as a high-risk or a low-risk firm. 6. Perform a Dupont analysis (rounding to two decimal places) for 2018 and 2019.
Profitability Ratios Katrina Corp. is a publicly traded company on a large stock exchange. Katrinas financial statement for 2019 and 2018 included the following data: Required: Calculate Katrinas earnings per share as it would be reported on the 2019 income statement.
Byers Company presents the following condensed income statement for 2019 and condensed December 31, 2019, balance sheet: Compute the following ratios for Byers ( round all computations to two decimals): ( 1) earnings per share, ( 2) gross profit margin, ( 3) operating profit margin, ( 4) net profit margin, ( 5) total asset turnover, ( 6) return on assets, (7) return on common equity, (8) receivables turnover (in days), and (9 ) interest coverage.
Compare the following for the year 2019, 2020 and 2021 for the Acer Company: analysis in words incl. total assets, short term assets, long-term assets, non-current assets, return on assets, equity, equity growth or decrease over the years, Price-Earning ratio, liabilities.
a) Evaluate the company’s liquidity and financial flexibility by calculating and analysing the following ratios for 2019. (i) Current ratio at December 31. (ii) Acid-test ratio at December 31. (iii)Accounts receivable turnover. (iv) Inventory turnover. (v) Return on assets. (vi) Profit margin on sales.
Instructions Using the financial statements and additional information, compute the following ratios for the El Camino Company for 2021. Show all computations. Computations 1. Current ratio 2. Return on common stockholders' equity 3. Price-earnings ratio 4. Inventory turnover 5. Accounts receivable turnover 6. Times interest earned 7. Profit margin 8. Days in inventory 9. Payout ratio 10. Return on assets
Liverton Co.’s income statement for the year ended 31 March 2019 and statements of financial position at 31 March 2019 and 2018 were as follows in the images. Calculate for the financial year ended 31 March 2019 and, where possible, for 31 March 2018, the following ratios: i) Gross profit marginii) Assets usageiii) Current ratioiv) Acid testv) Inventories holding periodvi) Debt to Equity ratio
Prepare a financial statement analysis in terms of liquidity, solvency, profitability and efficiency of the following company. Financial Ratios Fiscal Year Ended Previous Fiscal Year Formula Dec 31, 2019 Dec 31, 2018 Liquidity Analysis Ratios: Current Assets / Current Liabilities Current Ratio or 1.46 1.36 Working Capital Ratio (Current Assets - Inventory - Prepayments) / Current Liabilities Quick Ratio 0.96 0.86 Solvency Ratio Total Assets / Total Liabilities 1.46 1.44 Financial Leverage Ratios Debt Ratio Total Debt/Total Assets 0.47 0.48 Total Debt/Total Stockholders Equity Debt-to-Equity Ratio 1.48 1.57 Earnings Before Interest and Taxes (EBIT) / Interest Charges Total Assets / Total Stockholders' Equity Interest Coverage 2.38 2.61 Asset to Equity Ratio 3.16 3.28 Profitability Ratios Gross Profit Margin Sales - Cost of Goods Sold or Cost of Service / Sales 19.76 19.43 Net Profit Margin Net Profit / Sales 11.34 11.42 Net Income / Total Assets 2.67 2.9 Return on Assets Net Income /…