Homework Answers
| Part A Que 1: | |||||
| Ans: | |||||
| Working capital of company S: | |||||
| Working capital | = | Current asset-Current liabilities | |||
| Current asset | = | Cash+Accounts receivable+Inventory | |||
| Current asset | = | 51000+75000+84000 | |||
| Current asset | = | 210000 | |||
| Current liabilities | = | 105000 | |||
| Working capital | = | 210000-105000 | |||
| Working capital | = | 105000 | |||
| Working capital of company N: | |||||
| Working capital | = | Current asset/Current liabilities | |||
| Current asset | = | Cash+Accounts receivable+Inventory | |||
| Current asset | = | 20000+70000+160000 | |||
| Current asset | = | 250000 | |||
| Current liabilities | = | 100000 | |||
| Working capital | = | 250000-100000 | |||
| Working capital | = | 150000 | |||
| Part A Que 2: | |||||
| Ans: | |||||
| Current ratio of company S: | |||||
| Current ratio | = | Current asset/Current liabilities | |||
| Current asset | = | Cash+Accounts receivable+Inventory | |||
| Current asset | = | 51000+75000+84000 | |||
| Current asset | = | 210000 | |||
| Current liabilities | = | 105000 | |||
| Current ratio | = | 210000/105000 | |||
| Current ratio | = | 2.:1 | |||
| Current ratio of company N: | |||||
| Current ratio | = | Current asset/Current liabilities | |||
| Current asset | = | Cash+Accounts receivable+Inventory | |||
| Current asset | = | 20000+70000+160000 | |||
| Current asset | = | 250000 | |||
| Current liabilities | = | 100000 | |||
| Current ratio | = | 250000/100000 | |||
| Current ratio | = | 2.5:1 | |||
| Part A Que 3: | ||||
| Ans: | ||||
| Acid test ratio of company S: | ||||
| Acid test raio | = | Quick asset/Current liabilities | ||
| Quick asset | = | Current asset-Inventory | ||
| Quick asset | = | 210000-84000 | ||
| Quick asset | = | 126000 | ||
| Current liabilities | = | 105000 | ||
| Acid test raio | = | 126000/105000 | ||
| Current ratio | = | 1.2:1 | ||
| Acid test ratio of company N: | ||||
| Acid test raio | = | Quick asset/Current liabilities | ||
| Quick asset | = | Current asset-Inventory | ||
| Quick asset | = | 250000-160000 | ||
| Quick asset | = | 90000 | ||
| Current liabilities | = | 105000 | ||
| Acid test raio | = | 90000/105000 | ||
| Current ratio | = | 0.85:1 | ||
| Part A Que 4: | ||||
| Ans: | ||||
| Inventory turnover ratio of company S: | ||||
| Inventory turnover ratio | = | COGS/Average inventory | ||
| COGS | = | 504000 | ||
| Average inventory | = | 84000 | ||
| Inventory turnover ratio | = | 504000/84000 | ||
| Inventory turnover ratio | = | 6 times | ||
| Days in inventory turnover | = | 365/Inventory turnover ratio | ||
| Days in inventory turnover | = | 365/6 | ||
| Days in inventory turnover | = | 61 days | ||
| Inventory turnover ratio of company N: | ||||
| Inventory turnover ratio | = | COGS/Average inventory | ||
| COGS | = | 480000 | ||
| Average inventory | = | 160000 | ||
| Inventory turnover ratio | = | 480000/160000 | ||
| Inventory turnover ratio | = | 3 times | ||
| Days in inventory turnover | = | 365/Inventory turnover ratio | ||
| Days in inventory turnover | = | 365/3 | ||
| Days in inventory turnover | = | 122 days | ||
| Part A Que 5: | |||||
| Ans: | |||||
| Accounts receivable turnover ratio of company S: | |||||
| Accounts receivable turnover ratio | = | Net credit sales/average accounts receivable | |||
| Net credit sales | = | 675000 | |||
| Average accounts receivable | = | 75000 | |||
| Accounts receivable turnover ratio | = | 675000/75000 | |||
| Accounts receivable turnover ratio | = | 9 times | |||
| Days in receivable | = | 365/accounts receivabe turnover ratio | |||
| Days in receivable | = | 365/9 | |||
| Days in receivable | = | 41 days | |||
| Accounts receivable turnover ratio of company N: | |||||
| Accounts receivable turnover ratio | = | Net credit sales/average accounts receivable | |||
| Net credit sales | = | 560000 | |||
| Average accounts receivable | = | 70000 | |||
| Accounts receivable turnover ratio | = | 560000/70000 | |||
| Accounts receivable turnover ratio | = | 8 times | |||
| Days in receivable | = | 365/accounts receivabe turnover ratio | |||
| Days in receivable | = | 365/8 | |||
| Days in receivable | = | 46 days | |||
| Part B Que 1: | |||||||
| Ans: | |||||||
| Quality of company N working capital is more than Company, as a company has high working capital, | |||||||
| it has more than enough liquid funds to meet its short-term obligations, Hence company N is having | |||||||
| high quality of working capital than company S. | |||||||
| I would prefer to sell the RM20000 on a 30days credit to company "S" as they are having more | |||||||
| Liquid assets than companny "N"(Acid test ratio is better for Company "S" than Company "N". | |||||||
Add Answer to:
Ratio Question The selected financial data for Sand N Companies are presented at the end of...
Question The selected financial data for Sand N Companies are presented at the end of December...
Question The selected financial data for Sand N Companies are presented at the end of December 2011 Net credit sales Cost of goods sold Cash Accounts receivable, net Inventory Current liabilities SRM 675.000 504,000 51,000 75,000 34,000 105,000 NEMO 560,000 450,000 20,000 70,000 160,000 100,000 CA Assume that the year-end balance shown for accounts receivable and for inventory approximate the average balances of these items through the year Required: . For each of the 2 companies, compute the following 1....
Question 1 Shown below are selected financial data for AB and XY Limited at the end...
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please help solving the all the questions from question1a b to question2 a b. Please give...
please help solving the all the questions from
question1a b to question2 a b.
Please give a detailed explanation. Thank you!
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Summary information from the financial statements of two companies competing in the same industry follows. ...
Summary information from the financial statements of two companies
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Barco
Company
Kyan
Company
Barco
Company
Kyan
Company
Data from the current year-end balance
sheets
Data from the current year’s income
statement
Assets
Sales
$
770,000
$
880,200
Cash
$
19,500
$
34,000
Cost of goods sold
585,100
632,500
Accounts receivable, net
46,500
64,600
Interest expense
7,900
13,000
Merchandise inventory
84,440
132,500
Income tax expense
14,800
24,300
Prepaid expenses
5,000
6,950
Net income
162,200...
Question The selected financial data for Sand N Companies are presented at the end of December 2011 Net credit sales Cost of goods sold Cash Accounts receivable, net Inventory Current liabilities SRM 675.000 504,000 51,000 75,000 34,000 105,000 NEMO 560,000 450,000 20,000 70,000 160,000 100,000 CA Assume that the year-end balance shown for accounts receivable and for inventory approximate the average balances of these items through the year Required: . For each of the 2 companies, compute the following 1....
Question 1 Shown below are selected financial data for AB and XY Limited at the end of the current year AB Ltd XY Ltd Net credit sales $675,000 $560,000 Cost of goods sold 504,000 480,000 Cash 51,000 20,000 Accounts receivable 75,000 70,000 Inventory 84,000 160,000 Current liabilities 105,000 100,000 Required: a) For each of the two companies, compute the following 1. Working capital 2. Current ratio 3. Quick ratio 4. Inventory turnover ratio and average number of days required to...
please help solving the all the questions from
question1a b to question2 a b.
Please give a detailed explanation. Thank you!
Question 1 Shown below are selected financial data for AB and XY Limited at the end of the current year: AB Ltd XY Ltd Net credit sales $675,000 $560,000 Cost of goods sold 504,000 480,000 Cash 51,000 20,000 Accounts receivable 75,000 70,000 Inventory 84,000 160,000 Current liabilities 105,000 100,000 Required: a) For each of the two companies, compute the...
Summary information from the financial statements of two companies competing in the same industry follows Data che crester $80,000 $1,200 223.00Coutofel Recounts receivable at 290, 1 ,100 1. 0 306,00 ,150 Basie earnings per share Cash dividende per share Begini -year balance sheet dat 29.0 56.00 61.0 99,90 Current notes receivable (trade) Current liabilities Long-tembotes payable COLOR, 5 para Stained earnings Total liabilities and equity 99.500 39.000 200,00 15.00 40 2,500 236,000 Comon stock. 55 per value Required: ta. For...
i put the formulas for each question
2. Given the following data: 1989 1990 Cash $ 70,000 Marketable Securities 25,000 Accounts Receivable 120,000 Merchandise Inventory 190,000 Current Liabilities 160,000 Credit Sales (N ET SALES) 3,000,000 Cost of Goods Sold 59,000 21,000 140,000 240,000 152,000 2,716,000 2,160,000 2,500,000 Calculate for 1990: a. Working Capital b. Current Ratio c. Quick Ratio d. Inventory Turnover e Accounts Receivable Turnover a. Working Capital: current Asset current liability b. Current Ratio: current Habilities c. Quick...
Problem 18-05A a Suppose selected financial data of Target and Wal-Mart for 2020 are presented here (in millions). Net sales Cost of goods sold Selling and administrative expenses Interest expense Other income (expense) Income tax expense Target Wal-Mart Corporation Stores, Inc. Income Statement Data for Year $65,357 $408,214 45,583 304,657 15,101 79,607 707 2,065 (94) (411) 1,384 7,139 $ 2,488 $ 14,335 Net income Current assets Noncurrent assets Total assets Current liabilities Balance Sheet Data (End of Year) $18,424 $48,331...
Suppose selected financial data of Target and Wal-Mart for 2020 are presented here (in Millions). Net sales Cost of goods sold Selling and administrative expenses Interest expense Other income (expense) Income tax expense Net income Current assets Noncurrent assets Total assets Current liabilities Long-term debt Total stockholders' equity Total liabilities and stockholders' equity Target Wal-Mart Corporation Stores, Inc. Income Statement Data for Year $65,357 $408,214 45,583 304,657 15,101 79,607 707 2,065 (94) (411) 1,384 7.139 $ 2,488 $ 14,335 Balance...
Summary information from the financial statements of two companies
competing in the same industry follows.
Barco
Company
Kyan
Company
Barco
Company
Kyan
Company
Data from the current year-end balance
sheets
Data from the current year’s income
statement
Assets
Sales
$
770,000
$
880,200
Cash
$
19,500
$
34,000
Cost of goods sold
585,100
632,500
Accounts receivable, net
46,500
64,600
Interest expense
7,900
13,000
Merchandise inventory
84,440
132,500
Income tax expense
14,800
24,300
Prepaid expenses
5,000
6,950
Net income
162,200...
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