Business, 29.06.2021 17:10 alyssamaize

This problem Set is based on materials covered in modules 1 and 2. It is designed for you to demonstrate your understanding of basic financial statements, financial statement analysis, break-even concepts, financial and operating leverages. Before you start this assignment, please review Modules 1 and 2 materials thoroughly. Finance date of Adams Stores, Inc. for the year ending 2016 and 2017.
Items
2016
2017
Sales
$3,432,000
$5,834,400
Cash
9,000
7,282
Other Expenses
340,000
720,000
Retained Earnings
203,768
97,632
Long-term debt
323,432
1,000,000
Cost of goods sold
2,864,000
4,980,000
Depreciation
18,900
116,960
Short-term investments
48,600
20,000
Fixed Assets
491,000
1,202,950
Interest Expenses
62,500
176,000
Shares outstanding (par value = $46.00)
100,000
100,000
Market Price of stock
8.50
6
Accounts Receivable
351,200
632,160
Accounts payable
145,600
324,000
Inventory
715,200
1,287,360
Notes Payable
200,000
720,000
Accumulated Depreciation
146,200
263,160
Accruals
136,000
284,960
Tax Rate 40% 40%
Instructions:
As a group, complete the following activities using the financial information above:
Part 1: Financial Statements
A. Prepare the income statement for 2016 and 2017. Include statement of retained earnings for 2017. The company paid $11,000 dividend in 2017.
B. Prepare the balance sheet for 2016 and 2017
C. Prepare Common-Size financial statements of income statement and balance sheet.
D. Prepare Statement of Cash Flows.
Part 2: Financial Statement Analysis
A. Based on your financial statements (from Part 1), calculate the following ratios for the two years. Show all your calculations in good form. Show your formulas. If you use excel, each calculation need to show the excel formula
Current ratio
Quick ratio
Inventory turnover (times)
Average collection period (days)
Total asset turnover (times)
Debt ratio
Times interest earned
Gross profit margin
Net profit margin
Return on total assets
Return on equity
P/E ratio
Return on equity using DuPont Analysis
B. Comments on the ratios by comparing 2016 to 2017 ratios.
C. Assume Adams Stores, Inc. is a retail company similar to Walmart, Myers, or Target. Compare 2017 ratios to the industry average. Please note that Adams Stores, Inc. is not a real company. To find comparable industry ratios, you need to search for industry ratios for retail. See information on Moodle for instructions on how to find industry ratios. Based on the industry average, how is Adams Stores, Inc. doing financially?

Answers: 1

Show answers

Another question on Business

Business, 21.06.2019 21:30

Ryan terlecki organized a new internet company, capuniverse, inc. the company specializes in baseball-type caps with logos printed on them. ryan, who is never without a cap, believes that his target market is college and high school students. you have been hired to record the transactions occurring in the first two weeks of operations. issued 2,900 shares of $0.01 par value common stock to investors for cash at $29 per share. borrowed $68,000 from the bank to provide additional funding to begin operations; the note is due in two years. paid $1,000 for the current month's rent of a warehouse and another $1,000 for next month's rent. paid $1,440 for a one-year fire insurance policy on the warehouse (recorded as a prepaid expense). purchased furniture and fixtures for the warehouse for $16,000, paying $3,200 cash and the rest on account. the amount is due within 30 days. purchased for $2,800 cash the university of pennsylvania, notre dame, the university of texas at austin, and michigan state university baseball caps as inventory to sell online. placed advertisements on google for a total of $340 cash. sold caps totaling $1,900, half of which was charged on account. the cost of the caps sold was $1,100. (hint: make two entries.) made full payment for the furniture and fixtures purchased on account in (e). received $280 from a customer on account.

Answers: 2

Answer

Business, 22.06.2019 08:50

Suppose that in an economy the structural unemployment rate is 2.2 percent, the natural unemployment rate is 5.3 percent, and the cyclical unemployment rate is 2 percent. the frictional unemployment rate is percent and the actual unemployment rate (in this economy) is percent.

Answers: 2

Answer

Business, 22.06.2019 11:40

On coral island in 2012, the labor force is 12,000, the unemployment rate is 10 percent, and the labor force participation rate is 60 percent. during 2013, 200 unemployed people found jobs and the working-age population increased by 1,000. the total number of people in the labor force did not change. the working-age population at the end of 2013 was the unemployment rate at the end of 2013 was round up to the second decimal. the labor force participation rate at the end of 2013 was round up to the second decimal.

Answers: 1

Answer

Business, 22.06.2019 19:00

Andy purchases only two goods, apples (a) and kumquats (k). he has an income of $125 and can buy apples at $5 per pound and kumquats at $5 per pound. his utility function is u(a, k) = 6a + 2k. what is his marginal utility for apples and his marginal utility for kumquats? andy's marginal utility for apples (mu subscript a) is mu subscript aequals 6 and his marginal utility for kumquats (mu subscript k) is

Answers: 2

Answer

You know the right answer?

This problem Set is based on materials covered in modules 1 and 2. It is designed for you to demonst...

Questions