tine sing amounts, and complete the financial statements of limber Compath Compl
ID: 2585535 • Letter: T
Question
tine sing amounts, and complete the financial statements of limber Compath Complete the income statement first.) P13-8B Ratios Compared with Industry Averages You are analyzing the performance of Lumite Corpora- L04 tion, a manufacturer of personal care products, for the most recent year. The following data are taken from the firm's latest annual report: Quick assets Inventory and prepaid expenses . . Other assets. Dec. 31, 2016 Dec. 31, 2015 385,000 350,000 4,165,0003.700.000 $5,500,000 $4,870,000 820,000 109% Bonds payable... 79% Preferred stock . 1,300,000 900,000 1,800,000 800,000 370,000 . .. .$5,500,000 $4,870,000 900,000 Retained earnings Total Liabilities and Stockholders' Equity . . In 2016, net sales amount to $8,800,000, net income is $680,000, and preferred stock dividends paid are $65,000Explanation / Answer
1-
return on sales
net income/sales
7.73%
net income
680000
sales
8800000
2-
return on assets
net income/average assets
13.11%
net income
680000
average assets
(5500000+4870000)/2
5185000
3-
return on stockholders equity
net income/average stock holders equity
20.39%
net income
680000
average equity
(3600000+3070000)/2
3335000
4-
quick ratio
quick assets/current liabilities
0.641667
quick assets
385000
current liabilities
600000
5-
current assets
current assets/current liabilities
2.225
current assets
1335000
current liabilities
600000
6-
debt to equity ratio
total of liabilities/total of assets
0.345455
total of liabilities
1900000
total of assets
5500000
Ratio
Company
Industry
return on sales
7.73%
3.70%
companys return on sales are better than median value of industy
return on assets
13.11%
5.80%
it is also higher than industry average
return on stockholders equity
20.39%
18.50%
return on equity is also better than industry
quick ratio
0.641667
1
quick assets are less than industry value
current assets
2.225
2.2
it is alsmost the same as in the industry
debt to equity ratio
0.345455
1.07
it is less than industry it means it is a less levered in comparsion to industry
1-
return on sales
net income/sales
7.73%
net income
680000
sales
8800000
2-
return on assets
net income/average assets
13.11%
net income
680000
average assets
(5500000+4870000)/2
5185000
3-
return on stockholders equity
net income/average stock holders equity
20.39%
net income
680000
average equity
(3600000+3070000)/2
3335000
4-
quick ratio
quick assets/current liabilities
0.641667
quick assets
385000
current liabilities
600000
5-
current assets
current assets/current liabilities
2.225
current assets
1335000
current liabilities
600000
6-
debt to equity ratio
total of liabilities/total of assets
0.345455
total of liabilities
1900000
total of assets
5500000
Ratio
Company
Industry
return on sales
7.73%
3.70%
companys return on sales are better than median value of industy
return on assets
13.11%
5.80%
it is also higher than industry average
return on stockholders equity
20.39%
18.50%
return on equity is also better than industry
quick ratio
0.641667
1
quick assets are less than industry value
current assets
2.225
2.2
it is alsmost the same as in the industry
debt to equity ratio
0.345455
1.07
it is less than industry it means it is a less levered in comparsion to industry
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