MANAGERIAL ACCOUNTING HANDOUT PROBLEM 15 Score Name Section Problem (10 points).

Question

MANAGERIAL ACCOUNTING HANDOUT PROBLEM 15 Score Name Section Problem (10 points). The condensed financial statements of Marimba Company are provided below. MARIMBA COMPANY COMPARATIVE INCOME STATEMENTS (IN THOUSANDS) FOR YEARS ENDED DECEMBER 31, 20X0, 20X1, AND 20X2 20X2 20x1 20x0 74,000 S 45,658 28,342 59,000 33,866 25,134 68,000 S Sales Cost of Goods Sold Gross Margin From Sales Operating Expenses: 27,948 12,306 8,658 20,964 7,378 2.140 10,095 7,304 17,399 7,735 2,243 5,492 Selling Expenses 11,506 Administrative Expenses Total Expenses Income Before Taxes Income Tax Expense Net Income 8.262 19,768 8,180 2,372 5,808 S 5,238 S

Explanation / Answer

1. COMMON SIZE STATEMENT/VERTICAL ANALYSIS

_______________________________________________________________________________________

                                                                     2000             %                2001         %               2002           %       

2. HORIZONTAL ANALYSIS FOR BALANCE SHEET FOR 2001 AND 2002

    _________________________________________________________________________________________

                                                                     2001                    2002              Increase/Decrease

                                                                                                                      Amount            Percent              

Assets                                                     

Current Assets                                          $12,780                $11,940             $840                  7.04%  

Long term investments                                    0                           100              -100                 -100%

Plant & Equipment                                      19,150                  20,000             -850                   4.25%

Total Asset                                                  31,930                  32,040             -110                   0.3433%

Liabilities & Stockholders Equity   

Current Liabilities                                          5,050                   4,990               60                     1.20%

Common stock, $10 par                               13,500                 13,500               0                       0

Other Contributed capital                               1,850                   1,850               0                       0

Retained Earnings                                       11,530                  11,700            -170                   - 1.45 %              

Total Liabilities & Stockholders equity          31,930                 32,040            -110                   -03433%           

b.           Profit Margin Ratio          Profit after tax/Sales                5,808/68,000=8.54%         5,238/74,000= 7.08%

c.           Return on Total assets   Profit before tax/total assets    8,180/32,040=25.53          7,378/31,930=23.11%

d            Return on Stockholders

              Equity                                Profit after tax/Common stock    5,808/13,500=43.02%    5,238/13,500=38.8%

e.      Earnings per share         Net profit after tax/No.of shares         5,808/1350=4.30                5,238/1350=3.88

f.      Book value per share       Net worth/No. of shares                  27,050/1350=20.03             26,880/1350=19.91  

g.      Debt to Equity ratio          Debt/Equity                                         Nil/27,050=0                         Nil/26,880=0                                                                        

Note: Net worth = Common stock + Contributed capital + Retained earnings           

Debt = Long term debt i.e not available in the balance sheet

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