JDL Corporation Income Statement For the Year Ended December 31, 2015 Net sales
ID: 2462332 • Letter: J
Question
JDL Corporation
Income Statement
For the Year Ended December 31, 2015
Net sales $2,870
Cost of goods sold 1,985
Gross profit $ 885
Operating expenses 620
Operating profit $ 265
Interest expense 40
Earnings before taxes $ 225
Income tax expense 80
Net profit $ 145
JDL Corporation
Balance Sheet
December 31, 2015
Assets Liabilities and stockholders' equity
Current assets Current liabilities
Cash $ 25 Accounts payable $ 85
Short-term investments 15 Accrued liabilities 45
Accounts receivable 70 Total current liabilities 130
Inventory 150 Long-term debt 240
Total current assets 260 Total liabilities 370
Long-term assets Stockholders' equity
Net PPE 390 Common stock and PIC 80
Goodwill 210 Retained earnings 410
Total stockholders' equity 490
Total assets $860 Total liabilities and equity $860
JDL Corporation
Statement of Cash Flow Information
For the Year Ended December 31, 2015
Cash from operating activities $150
Investing activities:
Capital expenditures $ 60
Acquisitions $ 10
Financing activities:
Proceeds from long-term borrowing $ 50
Payments on long-term borrowing $ 25
Payments of cash dividends $ 20
Cash paid for interest $ 10
Cash paid for income taxes $ 75
1. JDL’s quick ratio is:
a. 0.85
b. 2.00
c. 1.00
d. 0.75
2. JDL’s average collection period is:
a. 5 days
b. 9 days
c. 13 days
d. 15 days
3. JDL’s days payable outstanding is:
a. 7 days
b. 11 days
c. 16 days
d. 22 days
4. JDL’s total asset turnover ratio is:
a. 3.98
b. 4.22
c. 5.91
d. 3.34
5. JDL’s times interest earned ratio is:
a. 1.50
b. 4.50
c. 6.63
d. 8.60
6. JDL’s cash flow adequacy ratio is:
a. 1.43
b. 2.15
c. 1.90
d. 0.54
7. JDL’s cash flow margin is:
a. 5.23%
b. 5.85%
c. 6.24%
d. 6.67%
8. JDL’s effective tax rate is:
a. 24.67%
b. 27.36%
c. 35.00%
d. 35.56%
9. JDL’s debt ratio is:
a. 40.11%
b. 43.02%
c. 55.80%
d. 56.32%
10. JDL’s return on equity is:
a. 20.62%
b. 25.50%
c. 29.59%
d. 28.49%
Explanation / Answer
= 260 – 150/130 = 0.85
Answer: Option a) 0.85
2.Receivable Turnover = Net Credit Sales/Average Account Receivable
= 2870/70 = 41
JDL’s Average collection period = 365 / Receivable Turnover = 365/41 = 8.9 or 9 days
Answer: Option b) 9 days
3.Account Payable Turnover Ratio =Cost of Goods Sold /Accounts Payable= 1985/85= 23.35
JDL’s days payable outstanding= 365/ Account Payable Turnover Ratio
= 365/23.35 = 16 days
Answer: Option c) 16 days
4.JDL’s Total Asset Turnover Ratio = Net Sales / Total Assets Turnover
= 2,870 /860 = 3.34
Answer: Option d) 3.34 days
5.JDL’s Times interest earned ratio = EBIT/Interest Expense = 265/40 = 6.63
Answer: Option c) 6.63
6.JDL’s Cash flow adequacy ratio =
Cash flow from operation/Long term debt paid + Purchase of Assets + Dividend paid
= 150/25 + 60 + 20= 150 /105 = 1.43
Answer: Option a) 1.43
7.JDL’s Cash flow margin = Cash flow from operations / Sales = 150/2870 = 5.23 %
Answer: Option a) 5.23 %
8.JDL’s Effective tax rate = Tax/Taxable Income = 80/225 = 35.56
Answer: Option d) 35.56 %
9.JDL’s Debt ratio = Total Liabilities/Total Assets = 370/860 = 43.02 %
Answer: Option b) 43.02 %
10.JDL’s Return on equity = Net Income/ Stock holders equity = 145/490 =29.59 %
Answer: Option c) 29.59 %
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.