Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN: 9781337115773
Author: Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher: Cengage Learning
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Textbook Question
Chapter 15, Problem 57P
Grammatico 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 Grammatico’s industry are as follows:
How does Grammatico compare with the industrial norms? Does it have too much debt?
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f. Inventory Turnover Ratio
g. Average Days in Inventory
h. Number of days in Operating Cycle
i. Debt to Total Assets Ratio
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m. Profit Margin Ratio
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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…
Chapter 15 Solutions
Managerial Accounting: The Cornerstone of Business Decision-Making
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Ch. 15 - Explain why an investor would be interested in a...Ch. 15 - Prob. 12DQCh. 15 - Prob. 13DQCh. 15 - When a company participates in a stock buyback...Ch. 15 - Explain the significance of the inventory turnover...Ch. 15 - In a JIT manufacturing environment, the current...Ch. 15 - Prob. 1MCQCh. 15 - Prob. 2MCQCh. 15 - Fractions or percentages computed by dividing one...Ch. 15 - Prob. 4MCQCh. 15 - Pedee Companys inventory turnover in days is 80...Ch. 15 - Prob. 6MCQCh. 15 - Prob. 7MCQCh. 15 - Prob. 8MCQCh. 15 - A small pizza restaurant, founded and owned by the...Ch. 15 - Prob. 10MCQCh. 15 - Prob. 11BEACh. 15 - Scherer Company provided the following income...Ch. 15 - Chen Company has current assets equal to...Ch. 15 - Last year, Nikkola Company had net sales of...Ch. 15 - Last year, Nikkola Company had net sales of...Ch. 15 - Paxton Company provided the following income...Ch. 15 - Ernst Companys balance sheet shows total...Ch. 15 - Prob. 18BEACh. 15 - Prob. 19BEACh. 15 - The income statement, statement of retained...Ch. 15 - The income statement, statement of retained...Ch. 15 - The income statement, statement of retained...Ch. 15 - The income statement, statement of retained...Ch. 15 - Jasmine Company provided the following income...Ch. 15 - Jasmine Company provided the following income...Ch. 15 - LoLo Lemon Company has current assets equal to...Ch. 15 - Last year, Tobys Hats had net sales of 45,000,000...Ch. 15 - Last year, Tobys Hats had net sales of 45,000,000...Ch. 15 - Alessandra Makeup Manufactures provided the...Ch. 15 - Klynveld Companys balance sheet shows total...Ch. 15 - Prob. 31BEBCh. 15 - Prob. 32BEBCh. 15 - The income statement, statement of retained...Ch. 15 - The income statement, statement of retained...Ch. 15 - The income statement, statement of retained...Ch. 15 - The income statement, statement of retained...Ch. 15 - Sundahl Companys income statements for the past 2...Ch. 15 - Sundahl Companys income statements for the past 2...Ch. 15 - Cuneo Companys income statements for the last 3...Ch. 15 - Cuneo Companys income statements for the last 3...Ch. 15 - Prob. 41ECh. 15 - Upton Company has current assets equal to...Ch. 15 - Montalcino Company had net sales of 54,000,000....Ch. 15 - Whalen Company had net sales of 125,500,250,000....Ch. 15 - Prob. 45ECh. 15 - Prob. 46ECh. 15 - Bryce Company manufactures pet supplies. However,...Ch. 15 - Prob. 48ECh. 15 - Prob. 49ECh. 15 - Juroe Company provided the following income...Ch. 15 - Juroe Company provided the following income...Ch. 15 - Juroe Company provided the following income...Ch. 15 - Rebert Inc. showed the following balances for last...Ch. 15 - Rebert Inc. showed the following balances for last...Ch. 15 - Rebert Inc. showed the following balances for last...Ch. 15 - The following selected information is taken from...Ch. 15 - Grammatico Company has just completed its third...Ch. 15 - The following information has been gathered for...Ch. 15 - Mike Sanders is considering the purchase of Kepler...Ch. 15 - Prob. 60PCh. 15 - Mike Sanders is considering the purchase of Kepler...Ch. 15 - Mike Sanders is considering the purchase of Kepler...Ch. 15 - Mike Sanders is considering the purchase of Kepler...Ch. 15 - Albion Inc. provided the following information for...Ch. 15 - Prob. 65PCh. 15 - Prob. 66PCh. 15 - Prob. 67C
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