chapter 9 akm
TRANSCRIPT
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Chapter 9 Financial Statement Analysis
Solutions to Optional Homework:
Exercise 93
a.KEYSTONE PUBLISHING COMPANY
Commo!Si"e Icome S#a#eme# $or #%e Year E&e& 'ecem(er 3)* +,,3
Ke-s#oe P(/is%i0P(/is%i0 I&s#r-
Com1a- A2era0eAmo# Perce#
Sa/es.................................................................. +*45,*,,, ),).,6 ),).,6
Sa/es re#rs a& a//o7aces......................... +4*5,, ) ., ) .,Ne# sa/es............................................................ +*4+5*5,, ),,.,6 ),,.,6Cos# o8 0oo&s so/&........................................... 5,*,,, 35 ., 4, .,Gross 1ro8i#....................................................... )*5:5*5,, ;5 .,6 ;, .,6Se//i0 ex1eses.............................................. 9:,*,,, 4,.,6 39.,6A&miis#ra#i2e ex1eses................................. +,*,,, )) .5 ), .5To#a/ o1era#i0 ex1eses................................ )*+5,*,,, 5) .56 49 .56O1era#i0 icome............................................. 3+5*5,, )3.56< ),.56O#%er icome.................................................... 3,*,,, ) .+ ) .+
355*5,, )4.:6 )).:6O#%er ex1ese................................................... 4,*,,, ) .; ) .:
Icome (e8ore icome #ax............................... 3)5*5,, )3.)6< ),.,6Icome #ax ex1ese......................................... 9:*,,, 4 ., 4 .,Ne# icome........................................................ +)*5,, 9 .)6< ; .,6
s (e##er #%a #%e i&s#r- (# %as s/i0%#/- %i0%er se//i0 a&a&miis#ra#i2e ex1eses re/a#i2e #o #%e i&s#r-. T%e case o8 #%e %i0%erse//i0 a& a&miis#ra#i2e ex1eses as a 1erce#a0e o8 sa/es* re/a#i2e #o #%ei&s#r-* ca (e i2es#i0a#e& 8r#%er.
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Exercise 94ATLAS $ITNESS E?UIPMENT COMPANY
Com1ara#i2e Ba/ace S%ee# 'ecem(er 3)* +,,4 a& +,,3
+,,4 +,,3
Amo# Perce# Amo# Perce#
Crre# asse#s............................... ),*,,, 3+.:36 )5,*,,, +9.)36Pro1er#-* 1/a#* a& e@i1me#.... 34,*,,, ;).+ 33,*,,, ;4.,I#a0i(/e asse#s........................... 3,*,,, 5 .45 35*,,, ; .:9............................... 5,*,,, 9.,9 4,*,,, :.::=e#aie& eari0s......................... +,5*,,, 3: .+: +,,*,,, 3 .3To#a/ /ia(i/i#ies a&
s#oc>%o/&ers e@i#-................ 55,*,,, ),, .,,6 5)5*,,, ),, .,,6
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a. ) Crre# ra#io DCrre# asse#s
Crre# /ia(i/i#ies
Crre# -ear9)4:
3;+4
,
,
D ,.55 Prece&i0 -ear+5:4
+5);
,
,
D ).4:
+ Aci&!#es# ra#io D ?ic> asse#sCrre# /ia(i/i#ies
Crre# -ear9)4:
4:+
,
,
D ,.3; Prece&i0 -ear+5:4
,335
,
,
D ).)
(. T%e /i@i&i#- o8 Pe1siCo %as &ec/ie& si0i8ica#/- o2er #%is #ime 1erio&.Bo#% #%e crre# a& aci&!#es# ra#ios %a2e &ec/ie& (- more #%a %a/8 8rom#%e 1rece&i0 -ear. A re2ie7 o8 #%e crre# asse#s a& /ia(i/i#ies re2ea/s #%a#cas% a& mar>e#a(/e secri#ies %a2e &ro11e& si0i8ica#/- 7%i/e s%or#!#erm(orro7i0s 7ere ma&e &ri0 #%e crre# -ear. T%e com(ie& e88ec# re&ce&Pe1siCos /i@i&i#- 1osi#io. 'ri0 #%is #ime 1erio&* Pe1siCo 7as ac@iri0
(o##/ers. T%is i2es#me# re@ire& cas% a& s%or#!#erm (orro7i0s* 7%ic%1/ace& a #em1orar- s@ee"e o /i@i&i#-.
Exercise 99
a. ) Acco#s recei2a(/e #ro2errecei2a(/eacco#sA2era0e
sa/esNe#
Crre# -ear+,:*)43
)*45,*,,,D :., Prece&i0 -ear
+);*;;:
)*3,,*,,,D ;.,
+ Nm(er o8 &a-sF sa/es i recei2a(/es sa/es&ai/-A2era0e
-earo8e&*recei2a(/eAcco#s
Crre# -ear
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Exercise 9)+
a. ) I2e#or- #ro2erCos# o8 0oo&s so/&
A2era0e i2e#or-
'e// +H+:4,,B
;;)*+5
D :5.:
Ga#e7a-+H)+,3)5B
+4)*5
D +4.)
+ Nm(er o8 &a-sF sa/es i i2e#or-I2e#or-* e& o8 -ear
A2era0e &ai/- cos# o8 0oo&s so/&
'e//i0 si0i8ica# a&2aces o 'e// sice #%es1eriori#- ra#io 8or #%e m(er o8 &a-s sa/es o8 i2e#or- si0 #%e e&i0
i2e#or- (a/ace is /ess #%a 8or #%e i2e#or- #ro2er si0 a2era0ei2e#or- (a/aces.
T%ese si0i8ica# &i88ereces are a res/# o8 'e//s ma>e!#o!or&er o1era#i0s#ra#e0-. 'e// %as sccess8//- &e2e/o1e& a ma8ac#ri0 1rocess #%a# isa(/e #o 8i// a cs#omer or&er @ic>/-. As a res/#* 'e// &oes o# ee& #o1re(i/& com1#ers 8or i2e#or-. Ga#e7a-* i co#ras#* 1re(i/&s com1#ers#o (e so/& i i#s re#ai/ c%ae/ a& 8or some o8 i#s #e/e1%oe a& i#ere#sa/es. I #%is i&s#r-* #%ere is 0rea# o(so/escece ris> i %o/&i0 com1#ersi i2e#or-. Ne7 #ec%o/o0- ca ma>e a i2e#or- o8 com1#ers &i88ic/# #ose// #%ere8ore* i2e#or- is cos#/- a& ris>-. 'e//s o1era#i0 s#ra#e0- iscosi&ere& re2o/#ioar- a& is o7 (ei0 a&o1#e& (- ma- (o#% i a& o#o8 #%e com1#er i&s#r-. I&ee&* a# #%e #ime o8 #%is 7ri#i0* Ga#e7a- a&He7/e##!Pac>ar& are c%a0i0 #%eir 1rac#ices #o mirror #%ose o8 'e//. As asi&e o#e* A11/e Com1#er em1/o-s simi/ar ma8ac#ri0 #ec%i@es as&oes 'e// a&* #%s* a/so eJo-s exce//e# i2e#or- e88iciec-.
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Exercise 9)3
a. =a#io o8 /ia(i/i#ies #o s#oc>%o/&ers e@i#-To#a/ /ia(i/i#ies
To#a/ s#oc>%o/&ersF e@i#-
'ec. 3)* +,,43*;,,*,,,
+*+5,*,,,D ,.;3 'ec. 3)* +,,3
3*),,*,,,
+*;,4*,,,D ,.4
(. Nm(er o8 #imes (o&i#eres# c%ar0es 7ere eare&E ex1eseI#eres#
ex1eseI#eres#K#ax(e8oreIcome
'ec. 3)* +,,4);*,,,
,,,);K+5+*,,, *,D +.5,
'ec. 3)* +,,3)9+*,,,
)9+*,,,+);*,,, GD +.)3
%o/&ers e@i#- a& #%e m(er o8 #imes(o& i#eres# c%ar0es 7ere eare& %a2e im1ro2e& si0i8ica#/- 8rom +,,3 #o+,,4. T%ese res/#s are #%e com(ie& res/# o8 a %i0%er icome (e8ore #axes*/o7er seria/ (o&s 1a-a(/e* a& /o7er crre# /ia(i/i#ies i #%e -ear +,,4com1are& #o +,,3.
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Exercise 9)4
a. =a#e eare& o #o#a/ asse#sNe# icome 1/s i#eres#
A2era0e #o#a/ asse#s
+,,4 %o/&ersF e@i#-
+,,4%o/&ersF e@i#-
+,,4
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Exercise 9)5
a. =a#e eare& o #o#a/ asse#s asse#s#o#a/A2era0eicomeNe#
+,,++H))5*49;*+B
),5*+9
D 3.3;6 +,,)+H)):*:;5))5*4B
3;3*5+
D ;.496
(. =a#e eare& o s#oc>%o/&ers e@i#-e@i#-rsFs#oc>%o/&eA2era0e
icomeNe#
+,,++H,+9*5:4)+9*;)+B
),5*+9
D 4.9)6 +,,)+H;++*5)5,+9*5:4B
3;3*5+
D 9.;)6
c. Bo#% #%e ra#e eare& o #o#a/ asse#s a& #%e ra#e eare& o s#oc>%o/&erse@i#- %a2e &e#eriora#e& o2er #%e #7o!-ear 1erio&. T%e ra#e eare& o #o#a/asse#s &ec/ie& 8rom ;.496 #o 3.3;6* 7%ic% is ear/- %a/8 #%e re#r o8 #%e1rior -ear. T%e ra#e eare& o s#oc>%o/&ers e@i#- &ec/ie& 8rom 9.;)6 #o4.9)6. T%e ra#e eare& o s#oc>%o/&ers e@i#- excee&s #%e ra#e eare& o#o#a/ asse#s &e #o #%e se o8 1osi#i2e /e2era0e.
&. $isca/ -ear +,,+ 7as a &i88ic/# #ime 8or #%e a11are/ i&s#r-. T%e ra#e eare&o #o#a/ asse#s 8or A Ta-/or (are/- excee&e& #%e i&s#r- a2era0e 3.3;62s. 3.+6. T%e ra#e eare& o s#oc>%o/&ers e@i#- 7as /ess #%a #%e i&s#r-a2era0e (- more #%a a 7%o/e 1erce#a0e 1oi# ;.496 2s. :.;6. T%iss00es#s #%a# #%e i&s#r- ses more /e2era0e #%a &oes A Ta-/or* oa2era0e.
Exercise 9);
a. =a#io o8 8ixe& asse#s #o /o0!#erm /ia(i/i#ies$ixe& asse#s
Lo0!#erm /ia(i/i#ies
)*+,,*,,,
+*5,,*,,,D +.,
(. =a#io o8 /ia(i/i#ies #o s#oc>%o/&ers e@i#-To#a/ /ia(i/i#ies
To#a/ s#oc>%o/&ersF e@i#-
3*5,,*,,,
)*3,,*,,,
D ,.3:
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Exercise 9); Coc/&e&
c. =a#io o8 e# sa/es #o asse#sNe# sa/es
A2era0e #o#a/ asse#s Bexc/&i0 i2es#me#s
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Exercise 9):
a. Nm(er o8 #imes (o&i#eres# c%ar0es 7ere eare&E
Icome (e8ore #ax K I#eres# ex1ese
I#eres# ex1ese
3;,*,,,3;,*,,,K,,*,,, D 3.++ #imes
(. Nm(er o8 #imes 1re8erre& &i2i&e&s 7ere eare&Ne# icome
Pre8erre& &i2i&e&s
5,*,,,
;,,*,,,D )+ #imes
c. Eari0s 1er s%are o commo s#oc>Ne# icome Pre8erre& &i2i&e&s
Commo s%ares o#s#a&i0
s%ares+5,*,,,
5,*,,,;,,*,,,D +.+,
&. Price!eari0s ra#ios%are1erEari0s
s%are1er1riceMar>e#
+.+,
44D +,
e. 'i2i&e&s 1er s%are o8 commo s#oc>Commo &i2i&e&s
Commo s%ares o#s#a&i0
s%ares+5,*,,,
++,*,,,D ,.
8. 'i2i&e& -ie/&Commo &i2i&e& 1er s%are
S%are 1rice
44.,,
,.99
D +6
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Exercise 9)
a. Eari0s 1er s%areNe# icome Pre8erre& &i2i&e&s
Commo s%ares o#s#a&i0
s%ares4,,*,,,
),9*,,,599*,,,D ).+,
(. Price!eari0s ra#ios%are1erEari0s
s%are1er1riceMar>e#
).+,
3;.,,D 3,
c. 'i2i&e&s 1er s%areCommo &i2i&e&s
Commo s%ares o#s#a&i0
s%ares4,,*,,,
5,,*,,,D ).+5
&. 'i2i&e& -ie/&Commo &i2i&e& 1er s%are
S%are 1rice
3;.,,
).+5D 3.4:6 ro&e&
Exercise 9)9
a. Eari0s 1er s%are o icome (e8ore ex#raor&iar- i#emsNe# icome...................................................................... +*,,*,,,Less 0ai o co&ema#io......................................... 4,,*,,,P/s /oss 8rom 8/oo& &ama0e........................................ ;,,*,,,Icome (e8ore ex#raor&iar- i#ems.............................. 3*,,,*,,,
Eari0s (e8ore ex#raor&iar- i#ems 1er s%are o commo s#oc>
Icome (e8ore ex#raor&iar- i#ems Pre8erre& &i2i&e&s
Commo s%ares o#s#a&i0
s%ares+5,*,,,
;4,*,,,3*,,,*,,,D 9.44 1er s%are
(. Eari0s 1er s%are o commo s#oc>Ne# icome Pre8erre& &i2i&e&s
Commo s%ares o#s#a&i0
s%ares+5,*,,,
;4,*,,,+*,,*,,,D .;4 1er s%are
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P=OBLEMS
Pro(/em 9)
).
BETTE= BISCUIT COMPANYCom1ara#i2e Icome S#a#eme#
$or #%e Years E&e& 'ecem(er 3)* +,,4 a& +,,3
Icrease 'ecrease
+,,4 +,,3 Amo# Perce#
Sa/es................................................. :)5*,,, 55,*,,, );5*,,, 3,.,,6Sa/es re#rs a& a//o7aces....... 5*,,, 5*,,, , ,.,,6Ne# sa/es.......................................... :),*,,, 545*,,, );5*,,, 3,.+6Cos# o8 0oo&s so/&......................... +)*+5, ++5*,,, 5;*+5, +5.,,6
Gross 1ro8i#..................................... 4+*:5, 3+,*,,, ),*:5, 33.96Se//i0 ex1eses............................. )3;*4,, )),*,,, +;*4,, +4.,,6A&miis#ra#i2e ex1eses............... 4+*35, 35*,,, :*35, +).,,6To#a/ o1era#i0 ex1eses............... ):*:5, )45*,,, 33*:5, +3.+6Icome 8rom o1era#ios................. +5,*,,, ):5*,,, :5*,,, 4+.;6O#%er icome................................... 3*5,, 3*,,, 5,, );.;:6Icome (e8ore icome #ax............. +53*5,, ):*,,, :5*5,, 4+.4+6Icome #ax ex1ese........................ 5*,,, ;,*,,, +5*,,, 4).;:6Ne# icome....................................... );*5,, ))*,,, 5,*5,, 4+.,6
+. T%e 1ro8i#a(i/i#- %as si0i8ica#/- im1ro2e&. Sa/es %a2e icrease& (- 3,6o2er #%e +,,3 (ase -ear. I a&&i#io* cos# o8 0oo&s so/&* se//i0 ex1eses*a& a&miis#ra#i2e ex1eses 0re7 a# a s/o7er ra#e. Icreasi0 sa/escom(ie& 7i#% cos#s #%a# icrease a# a s/o7er ra#e res/# i s#ro0 eari0s0ro7#%. I #%is case* e# icome 0re7 i excess o8 4+6 o2er #%e (ase -ear.
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Pro(/em 9+
).
STAINLESS $LO SYSTEMS INC.
Com1ara#i2e Icome S#a#eme# $or #%e Years E&e& 'ecem(er 3)* +,,4 a& +,,3
+,,4 +,,3
Amo# Perce# Amo# Perce#
Sa/es..................................................... ),*,,, ),,.;+6 ::5*,,, ),,.;56Sa/es re#rs a& a//o7aces........... 5*,,, , .;+ 5*,,, , .;5Ne# sa/es.............................................. ,5*,,, ),,.,,6 ::,*,,, ),,.,,6Cos# o8 0oo&s so/&............................. 43*:,, 54 .5, 4);*,,, 54 .,3Gross 1ro8i#......................................... 3;;*3,, 45 .5,6 354*,,, 45 .9:6Se//i0 ex1eses................................. );5*,, +,.;,6 ))5*,, )5.,46A&miis#ra#i2e ex1eses................... 9;*;,, )+ .,, 93*4,, )+ .)3To#a/ o1era#i0 ex1eses................... +;+*4,, 3+ .;,6 +,9*+,, +: .):6Icome 8rom o1era#ios..................... ),3*9,, )+.9,6< )44*,, ).,6i0 Crre# Aci&!Tes# Crre# ?ic> Crre#Trasac#io Ca1i#a/ =a#io =a#io Asse#s Asse#s Lia(i/i#ies
a. 44,*,,, +.4: ).45 :4,*,,, 435*,,, 3,,*,,,(. 44,*,,, +.3 ).5; ;,*,,, 3:5*,,, +4,*,,,c. 44,*,,, +.+9 ).+ :,*,,, 435*,,, 34,*,,,&. 44,*,,, +.5: ).4 :+,*,,, 4)5*,,, +,*,,,e. 4)5*,,, +.+ ).34 :4,*,,, 435*,,, 3+5*,,,8. 44,*,,, +.4: ).45 :4,*,,, 435*,,, 3,,*,,,0. 5;,*,,, +.: ).5 ;,*,,, 555*,,, 3,,*,,,
%. 44,*,,, +.4: ).45 :4,*,,, 435*,,, 3,,*,,,i. 54,*,,, +., ).: 4,*,,, 535*,,, 3,,*,,,
J. 44,*,,, +.4: ).4+ :4,*,,, 4+;*,,, 3,,*,,,
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Pro(/em 94
). or>i0 ca1i#a/ )*999*,,, ;,,*,,, D )*399*,,,
Ca/c/a#e&
=a#io Nmera#or 'eomia#or a/e
+. Crre# ra#io................... )*999*,,, ;,,*,,, 3.3
3. Aci&!#es# ra#io................ )*4:3*,,, ;,,*,,, +.5
4. Acco#s recei2a(/e
#ro2er.......................... ;*),,*,,, 35,*,,, 3;5*,,,+ ):.)
5. Nm(er o8 &a-sF sa/es
i recei2a(/es................. 35,*,,, ;*),,*,,,3;5 +,.9
;. I2e#or- #ro2er......... +*,,*,,, 5,,*,,, 4,*,,,+ 5.:
:. Nm(er o8 &a-sF sa/es
i i2e#or-.................... 5,,*,,, +*,,*,,,3;5 ;5.+
. $ixe& asse#s #o /o0!#erm /ia(i/i#ies................ 3*),,*,,, )*,,*,,, ).:
9. Lia(i/i#ies #o s#oc>!
%o/&ersF e@i#-............... +*4,,*,,, 3*399*,,, ,.:
),. Nm(er o8 #imes
i#eres# c%ar0es
eare&............................. :33*,,, )5:*,,, )5:*,,, 5.:
)). Nm(er o8 #imes
1re8erre& &i2i&e&s
eare&............................. 5,3*,,, 4*,,, ),.5
)+. =a#io o8 e# sa/es #o
asse#s............................. ;*),,*,,, 5*,99*,,, 3*;4*,,,+ ).4)3. =a#e eare& o #o#a/
asse#s............................. 5,3*,,, )5:*,,, 5*:99*,,, 4*3;4*,,,+ )3.,6
)4. =a#e eare& o s#oc>!
%o/&ersF e@i#-............... 5,3*,,, 3*399*,,, +*9;4*,,,+ )5.6
)5. =a#e eare& o
commo s#oc>!
%o/&ersF e@i#-............... 5,3*,,, 4*,,, +*:99*,,, +*4;4*,,,+ ):.36
);. Eari0s 1er s%are
o commo s#oc>.......... 5,3*,,, 4*,,, )5,*,,, 3.,3
):. Price!eari0s ra#io....... ,.,, 3.,3 +;.4
). 'i2i&e&s 1er s%areo8 commo s#oc>........... )+,*,,, )5,*,,, ,.,
)9. 'i2i&e& -ie/&................ ,., ,.,, ).,6
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Pro(/em 95
). a.
,.,,
,.,5
,.),
,.)5
,.+,
,.+5
,.3,
+,,, +,,) +,,+ +,,3 +,,4
Years
=a#e
Ear
e&
o
To#a/Asse#s
I&s#r- P1i#er Com 1a-
+,,4,,,*3,,*+
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Pro(/em 95 Co#ie&
). (.
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,.),
,.+,
,.3,
,.4,
,.5,
,.;,
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Years
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Pro(/em 95 Co#ie&
). c.
,
,.5
)
).5
+
+.5
3
3.5
4
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Years
N.m(ero8Times
I#eres#C%ar0esEare&
I&s#r- 1i#er Com 1a-
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Pro(/em 95 Co#ie&
). &.
,.5,
).,,
).5,
+.,,
+.5,
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Years
=a#ioo8Lia(i/i#ie
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Pro(/em 95 Coc/&e&
+. Bo#% #%e ra#e eare& o #o#a/ asse#s a& #%e ra#e eare& o s#oc>%o/&ersFe@i#- %a2e (ee mo2i0 i a e0a#i2e &irec#io i #%e /as# 8i2e -ears. Bo#%measres %a2e mo2e& (e/o7 #%e i&s#r- a2era0e 7i#%i #%e /as# -ear. T%e
ra#e eare& o s#oc>%o/&ersF e@i#- %as (ee mo2i0 &o7 a# a 8as#er ra#e(ecase o8 #%e icreasi0 se o8 /e2era0e o2er #%e #ime 1erio&. T%e se o8/e2era0e &e(# ca (e see 8rom #%e ra#io o8 /ia(i/i#ies #o s#oc>%o/&ersFe@i#-. T%is ra#io %as 8a//e (e/o7 #%e i&s#r- a2era0e* i&ica#i0 #%a# #%ecom1a- %as more &e(# re/a#i2e #o s#oc>%o/&ersF e@i#-. Sice #%e ra#eeare& o asse#s %as (ee (e/o7 #%e i#eres# cos# o8 #%e &e(# i #%e /as#-ear* #%e ra#e eare& o s#oc>%o/&ersF e@i#- %as (ee (e/o7 #%e ra#e eare&o asse#s #%e se o8 /e2era0e %as %a& a e0a#i2e im1ac#. T%e m(er o8#imes i#eres# c%ar0es %a2e (ee eare& %as (ee 8a//i0 (e/o7 #%e i&s#r-a2era0e 8or se2era/ -ears. T%is is #%e com(ie& res/# o8 a icreasi0 se o8/e2era0e a& /o7 1ro8i#a(i/i#-. T%e m(er o8 #imes i#eres# is eare& %as
8a//e #o a &a0eros/- /o7 /e2e/ i +,,4. T%e /o7 1ro8i#a(i/i#- a& #imesi#eres# c%ar0es are eare& i +,,4* as 7e// as #%e 8i2e!-ear #re&* s%o/& (ea maJor cocer #o #%e com1a-Fs maa0eme#* s#oc>%o/&ers* a& cre&i#ors.