1.
Introduction:
To calculate:
2.
Introduction: Financial Statements depicts the financial position of a firm at a particular point of time or specified date. It helps to analyze the efficiency and performance of the company.
To calculate:
3.
Introduction: Financial Statements depicts the financial position of a firm at a particular point of time or specified date. It helps to analyze the efficiency and performance of the company.
To discuss: The difference in two companies as current assets are at the end of the recent years and recognize the largest current asset each company reports at the end of the recent year.
4.
Introduction: Financial Statements depicts the financial position of a firm at a particular point of time or specified date. It helps to analyze the efficiency and performance of the company.
To comment: On the liquidity of each company.
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Financial Accounting: The Impact on Decision Makers
- Comparing Two Companies in the Same Industry: Chipotle and Panera Bread Refer to the financial information for Chipotle and Panera Bread reproduced at the end of this book and answer the following questions: Required What is the dollar amount of inventories that each company reports on its balance sheet at the end of the most recent year? What percentage of total assets do inventories represent for each company? What does this tell you about the nature of their business? Refer to Note 1 in Chipotles annual report. What inventory valuation method does the company use? Refer to Note 2 in Panera Breads annual report. What inventory valuation method does the company use? How do both companies deal with situations in which the market value of inventory is less than its cost? Given the nature of their businesses, which inventory system, periodic or perpetual, would you expect both Chipotle and Panera Bread to use? Explain your answer.arrow_forwardGrammatico Company has just completed its third year of operations. The income statement is as follows: Selected information from the balance sheet is as follows: Required: Note: Round answers to two decimal places. 1. Compute the times-interest-earned ratio. 2. Compute the debt ratio. 3. CONCEPTUAL CONNECTION Assume that the lower quartile, median, and upper quartile values for debt and times-interest-earned ratios in Grammaticos industry are as follows: How does Grammatico compare with the industrial norms? Does it have too much debt?arrow_forwardThe following data (in millions) were taken from the financial statements of Costco Wholesale Corporation: a. For Costco, determine the amount of change in millions and the percent of change (round to one decimal place) from the prior year to the recent year for: 1. Revenue 2. Operating expenses 3. Operating income b. Comment on the results of your horizontal analysis in part (a). c. Based upon Exercise 2-23, compare and comment on the operating results of Target and Costco for the recent year.arrow_forward
- The following historical information is from Assisi Community Markets. Calculate the working capital and current ratio for each year. What observations do you make, and what actions might the owner consider taking?arrow_forwardAnalyze and compare Zynga, Electronic Arts, and Take-Two Data (in millions) from recent financial statements of Zynga Inc. (ZNGA), Electronic Arts Inc. (EA), and Take-Two Interactive Software, Inc. (TTWO) are as follows: a. Compute the working capital for Year 2 and Year 1 for each company. b. Which company has the largest working capital? c. Compute the current ratio for Year 2 and Year 1 for each company. Round to one decimal place. d. For Year 2, rank the companies from most liquid to least liquid based upon the current ratio.arrow_forwardThe following financial data (in thousands) were taken from recent financial statements of Staples, Inc.: Please see the attachment for details: 1. Determine the times interest earned ratio for Staples in Year 3, Year 2, and Year 1? Round your answers to one decimal place.2. Evaluate this ratio for Staples.arrow_forward
- Question 2Alex is currently considering to invest his money in one of the companies between Company A and Company B. The summarized final accounts of the companies for their last completed financial year are as follows: a. Calculate the following ratios for Company A and Company B. State clearly the formulae used for each ratio: i. Gross Profit Marginii. Net Profit Marginiii. Inventory Turnover Period (days)iv. Receivables Collection Period (days)arrow_forwardList the amount of Current Assets and Current Liabilities for the currently reported year, and for the previous year. Use these amounts to calculate the company's working capital and current ratio.arrow_forwardThe following financial information was obtained from the year ended 2024 income statements for Luigi Automotive and Steinbeck Automotive: (Click the icon to view the financial information.) Requirements 1. Compute the times-interest-earned ratio for each company. Round to two decimals. 2. Which company was better able to cover its interest expense? Requirement 1. Compute the times-interest-earned ratio for each company. Round to two decimals. Begin by showing the formula for the times-interest-earned ratio. Times-interest-earned ratio = C--) Data table Net income Income tax expense Interest expense Print $ Luigi Steinbeck 52,395 $ 20,590 550 Done 89,990 26,260 3,100 Xarrow_forward
- eBook Print References 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 Total current assets. BALANCE SHEET (Figures in $ millions) Net property, plant, and equipment Other long-term assets $ 12,600 3,760 4,127 2,338 $ 2,375 655 Total assets Liabilities and shareholders' equity Payables Short-term debt $1,720 361 $ 1,359 $816 Other current liabilities Total current liabilities Long-term debt and leases Other long-term liabilities Shareholders' equity Total liabilities and shareholders' equity End of Year Start of Year $ 152 2,370 208 902 $ 3,632 19,855 3,710 $ 27,197 $83 2,082 157 837 $ 3,159 19,913 4,156 $ 27,228 $ 2,504 1,389 781 $ 4,674 8,512 6,118 7,924 $ 27,228 $ 2,980 1,543 757 $5,280 7,907 6,089 7,921 $ 27,197 Calculate the following…arrow_forwardAlex is currently considering to invest his money in one of the companies betweenCompany A and Company B. The summarized final accounts of the companies for theirlast completed financial year are as follows: (please refer to the images) Required:a. Calculate the following ratios for Company A and Company B. State clearly theformulae used for each ratio:iv. Receivables Collection Period (days)v. Payables Payment Period (days)vi. Current Ratiovii. Quick Ratio + Comment on each of the ratios calculated in part (a) above.arrow_forwardPrepare a comparative common-size income statement for Jubilee Corporation. To an investor, how does the current year compare with the prior year? Explain your reasoning. E (Click the icon to view the comparative income statement.) Data table Start by calculating the percentages. (Round the percentages to two decimal places, X.XX.) Jubilee Corporation Comparative Common-Size Income Statement A C For the Years Ended December 31 1 Jubilee Corporation Current 2 Income Statement year Prior year 3 For the Years Ended December 31 Sales revenues 100.00 % 100.00 % 4 (amounts in thousands) Less: Cost of goods sold % % Current Gross profit % % year Prior year Less: Operating expenses % 6 Sales revenues $ 494,208 $ 429,000 % Operating income % 7 Less: Cost of goods sold 172,640 160,000 Less: Interest expense 8 Gross profit 2$ 321,568 $ 269,000 0% Income before income taxes % % 9 Less: Operating expenses 143,370 135,000 Less: Income tax expense 10 Operating income 2$ 178,198 $ 134,000 % % 11 Less:…arrow_forward
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