Financial Accounting Intro Concepts Meth/Uses
14th Edition
ISBN: 9781285595047
Author: Weil
Publisher: Cengage
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The comparative statements of Dubai Company are presented below.
All sales were on account. The allowance for doubtful accounts was $3,200 on December 31, 2017, and $3,000 on December 31, 2020.
Required:
Compute the following ratios for 2021. (Weighted average common shares in 2021 were 62,500.)
Earnings per share.
Return on common stockholders’ equity.
Return on assets.
Profitability ratios. Reading material see chapter 3 and Profitability measures chapter 11. The table here shows
information pertaining to the financial year that ended on 31.12.2023. Amounts in €: Income (net sales) 400, 000 Profit (
net income) 60,000 Average asset balance 1,000,000 Average balance of equity 600,000 Dividend paid per share 2.40
Earnings per share (EPS) 6.00 Exchange rate (value) per share at the end of the year 96.00 a) Calculate the profit ratio,
turnover rate of assets and return on total assets for the year, i. e. ROI (also use DuPont Model) b) Calculate the return
on equity for the year (ROE) c) Calculate the P/E ratio for the year d) Calculate the payout ratio for the year e) Calculate
the dividend yield
The comparative statements of Dubai Company are presented below.
All sales were on account. The allowance for doubtful accounts was $3,200 on December 31, 2017, and $3,000 on December 31, 2020.
Required:
Compute the following ratios for 2021. (Weighted average common shares in 2021 were 62,500.)
Times interest earned.
Asset turnover.
Debt to assets.
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- The comparative statements of Dubai Company are presented below. All sales were on account. The allowance for doubtful accounts was $3,200 on December 31, 2017, and $3,000 on December 31, 2020. Required: 1- Compute the following ratios for 2021. (Weighted average common shares in 2021 were 62,500.) Earnings per share. Return on common stockholders’ equity. Return on assets. Current. Acid-test. Accounts receivable turnover. Inventory turnover. Times interest earned. Asset turnover. Debt to assets. 2. Based on the ratios calculated, discuss briefly the improvement or lack thereof in financial position and operating results from 2020 to 2021 of Dubai Company.arrow_forwardHello! look at the attached images and answer: (a) Calculate ratios for the year ended 31 December 2021 (showing your workings) for Primrose Plc, equivalent to those provided above. i. Return on year-end capital employed ii. Net asset turnover iii. Gross profit margin iv. Net profit margin v. Current ratio vi. Closing inventory holding period vii. Trade receivables’ collection period viii. Trade payables’ payment period ix. Dividend yield x. Dividend cover (b) Analyse the financial performance and position of Primrose Plc for the year ended 31 December 2021 compared to 31 December 2020. (c) Explain the uses and the general limitations of ratio analysis. Thanks a lot!arrow_forwardNotes relating to the above Statements (pictures): i. The market value of the shares of the business at the end of the reporting period was £3.00 for 2019 and £2.00 for 2020. ii. All sales and purchases are made on credit. iii. At 1 April 2018, the trade receivables stood at £250 million and the trade payables at £210 million. iv. A dividend of £40 million had been paid to the shareholders in respect of each of the years. v. The business employed 14,000 staff at 31 March 2019 and 18,628 at 31 March 2020. vi. The business expanded its capacity during 2020 by setting up a new warehouse and distribution centre. vii. At 1 April 2018, the total of equity stood at £450 million and the total of equity and non-current liabilities stood at £650 million. Required Using the information from the given financial statements, statement of financial position (balance sheets) and income statement (profit & loss accounts) in page 3, calculate and interpret the following ratios for XYZ Plc for the…arrow_forward
- Notes relating to the above Statements (pictures): i. The market value of the shares of the business at the end of the reporting period was £3.00 for 2019 and £2.00 for 2020. ii. All sales and purchases are made on credit. iii. At 1 April 2018, the trade receivables stood at £250 million and the trade payables at £210 million. iv. A dividend of £40 million had been paid to the shareholders in respect of each of the years. v. The business employed 14,000 staff at 31 March 2019 and 18,628 at 31 March 2020. vi. The business expanded its capacity during 2020 by setting up a new warehouse and distribution centre. vii. At 1 April 2018, the total of equity stood at £450 million and the total of equity and non-current liabilities stood at £650 million. Required Using the information from the given financial statements, statement of financial position (balance sheets) and income statement (profit & loss accounts) in page 3, calculate and interpret the following ratios for XYZ Plc for the…arrow_forwardEaster Egg and Poultry Company has $1,700,000 in assets and $681,000 of debt. It reports net income of $148,000. a. What is the firm's return on assets? Note: Enter your answer as a percent rounded to 2 decimal places. Return on assets b. What is its return on stockholders' equity? Note: Enter your answer as a percent rounded to 2 decimal places. Return on equity ......... Profit margin % c. If the firm has an asset turnover ratio of 1 times, what is the profit margin (return on sales)? Note: Enter your answer as a percent rounded to 2 decimal places. % %arrow_forwardThreads Limited manufactures nuts and bolts, which are sold to industrial users. The abbreviated financial statements for 2018 and 2019 are as follows: See images Dividends were paid on ordinary shares of £70,000 and £72,000 for 2018 and 2019, respectively. Required: (a) Calculate the following financial ratios for both 2018 and 2019 (using year-end figures for statement of financial position items): 1 return on capital employed 2 operating profifit margin 3 gross profifit margin 4 current ratio 5 acid test ratio 6 settlement period for trade receivables 7 settlement period for trade payables 8 inventories turnover period. (b) Comment on the performance of Threads Limited from the viewpoint of a business considering supplying a substantial amount of goods to Threads Limited on usual trade credit terms.arrow_forward
- . Moody Instruments had retained earnings of $300,000 at December 31, 2017. Netincome for 2018 totaled $200,000, and dividends declared for 2018 were $55,000. How muchretained earnings should Moody report at December 31, 2018?a. $500,000b. $445,000c. $300,000d. $355,000arrow_forwardThe following data is extracted from ABC Bank financial statements for the financial year ended 31 December 2021, equity $600 million, interest expense $190 million, provision for loan loss (P) $28 million, noninterest income $25 million, noninterest expense $45 million and a tax rate is 33%. Calculate the minimum total interest income required to give a return on equity (ROE) of 14%.arrow_forwardThe market capitalization of Abutia Plc as at 31 December 2018 was GHC21 million. The stated capital of the company consists of 10 million ordinary shares . The profit after tax for the year ended 31 December 2018 was GHC 2.8 million . The dividend pay-out rate for the year was 80%.Calculate the Price –earning ratio of Abutia Plcarrow_forward
- The assets of ABC Limited consists of fixed and current while its current liabilities comprise bank credit and trade credit in the ratio of 3:1. From the following figures relating to the company for the year.2015. Share capital Working capital A Gross profit Stock turnover-oh Average collection period Current ratio Quick ratio - Reserves and surplus to cash Current Assal chat Rs.299,500 90,000 25% Required: Prepare its balance sheet showing the details for working: 8 1.5 months 2.5 1.5 4.5 Page 1 of 3arrow_forwardWifi Around reports net income for the year of $220,000. Retained earnings at the beginning and end of the year are $810,000 and $930,000, respectively. What is the cash paid for dividends during the year (assume any dividends declared were paid)?arrow_forwardfrom these data? BE18-13 Guo Company has stockholders' equity of $400,000 and net income of $66,000. It has a payout ratio of 20% and a return on assets of 15%. How much did Guo pay in cash dividends, and what were its average assets?arrow_forward
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