100% B. Frí Dec 8 10:26:08 PM a Problem 3-13 Data for Lozano Chip Company and it
ID: 2800544 • Letter: 1
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100% B. Frí Dec 8 10:26:08 PM a Problem 3-13 Data for Lozano Chip Company and its industry averages follow Lozano Chip Company: Balance Sheet as of December 31, 2013 (Thousands of Dollars) 225,000 $601,866 326,634 25,000 $1,453,500 1,068,750 1,752,750 Accounts payable 1,575,000Notes payable 1,125,000 Other current iailities Total current assets $2,925,000 Net fixed assets 350,000 Long-term debt Common equity Total liabities and equity Lozano Chip Company: Income Statement for Year Ended December 31, 2013 (Thousands of Dellars) $7,500,000 Cost of goods sold Selling general and administrative expenses Earnings before interest and taxes (EBIT) $ 300,000 113,631 S 188,369 75.348 $113,022 Interest expense Earnings before taxes (EBT) Federal and state norme taxes (40%) Net income . Calculate the indicated retios for Lozano. Round your answers to two decimal places. Lozano Industry Average Current assets/Current Days sales outstanding* 35.0 day Net Income/Sales Net incoma/Common equity Total debt/Total assets (submit integer value) 60.0%Explanation / Answer
a.
Current asset / Current liabilities = $2,925,000 / $1,453,500 = 2.01
Days sales outstanding = (Receivable / Credit sales) × Days in a year
= (1,575,000 / 7,500,000) × 365
= 76.65
COGS / Inventory = Cost of goods sold / Average inventory
= 6,375,000 / 1,125,000
= 5.67
Sales / Fixed assets = 7,500,000 / 1,350,000 = 5.56
Sales / Total assets = 7,500,000 / 4,275,000 = 1.75
Net income / Sales = (113,022 / 7,500,000) × 100 = 1.51%
Net income / Total assets = (113,022 / 4,275,000) × 100 = 2.64%
Net income / Common equity = (113,022 / 1,752,750) × 100 = 6.45%
Total liabilities/Total assets= {(Current liabilities + Long-term debt)/Total assets} ×100
Total debt / Total assets = {Long-term debt / Total assets} ×100
= (1,068,750 / 4,275,000) × 100
= 25%
Total liabilities/Total assets = {(Current liabilities + Long-term debt)/Total assets} ×100
= {(1,453,500 + 1,068,750) / 4,275,000} × 100
= (2,522,250 / 4,275,000) × 100
= 59%
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