Question

Konami Inc. Ratio Questions

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Questions:

1. What is the Current Ratio for 2014 & 2015?

2. What is the Net Operating profit percentage (%) for 2014 & 2015?

3. What is the Accounts Receivable Turnover in days for 2014 and 2015?

4. What is the Inventory Turnover in “times,” and days for 2014 and 2015?

                                                Konami Inc.

assets	2015	2014
Current Assets:
Cash and Cash Equivalents	$56,540,000	$50,886,000
Receivables – net	14,000,000	11,200,000
Inventory	11,000,000	4,400,000
Other current Assets	5,000,000	4,500,000
Total Current Assets	86,540,000	70,986,000
PP&E – net	24,000,000	21,600,000
Other Assets	10,000,000	9,000,000
Total Assets	$125,540,000	$106,086,000
Current Liabilities
Accounts Payable	$ 24,000,000	$21,600,000
Current portion of long-term debt	5,000,000	4,000,000
Other current liabilities	1,000,000	1,000,000
Total current liabilities	30,000,000	26,600,000
Long-term debt	15,000,000	12,000,000
Total liabilities	$45,000,000	$38,600,000
Stockholders’ equity
Common stock	500,000	500,000
Additional paid-in capital	8,500,000	8,500,000
Retained earnings	71,540,000	58,486,000
Total stockholders’ equity	$80,540,000	$67,486,000
	For the Year Ended 2015	For the Year Ended 2014
Sales	94,000,000	84,000,000
Cost of Goods Sold	52,000,000	44,000,000
Gross Profit	42,000,000	40,000,000
Operating Expenses:
Selling Expenses	10,000,000	9,000,000
General and administration	16,000,000	15,000,000
Depreciation Expense	1,000,000	500,000
Income from Operations	27,000,000	24,500,000
Other Revenue and expenses:
Interest Income	50,000	48,000
Interest Expense	150,000	140,000
Income before taxes	14,800,000	15,312,000
Provision for income taxes	1,746,000	1,800,000
Net Income	13,054,000	13,512,000

Answer 1

(1) Current Ratio for 2014 & 2015

Current Ratio = Total Current Assets / Total Current Liabilities

2015

= $86,540,000 / $30,000,000

= 2.88

= 2.88 : 1

2014

= $70,986,000 / $26,600,000

= 2.67

= 2.67 : 1

(2) Net Operating profit percentage (%) for 2014 & 2015

Net Operating profit percentage = [Income from Operations / Sales ] x 100

2015

= [ $ 27,000,000 / $ 94,000,000 ] x 100

= 28.72%

2014

= [ $24,500,000 / $84,000,000 ] x 100

= 29.17%

(3) Accounts Receivable Turnover in days for 2014 and 2015

Accounts Receivable Turnover in days = 365 Days / Accounts Receivable turnover

Accounts Receivable turnover = Net Sales / Accounts Receivables

Accounts Receivable turnover 2015

= $ 94,000,000 / $ 14,000,000

= 6.71 Times

Accounts Receivable Turnover in days 2015

= 365 / 6.71

= 54.36 Days

Accounts Receivable turnover 2014

= $ 84,000,000 / $ 11,200,000

= 7.5 Times

Accounts Receivable Turnover in days 2014

= 365 / 7.5

= 48.67 Days

(4) Inventory Turnover in “times,” and days for 2014 and 2015

Inventory Turnover in “times,” = Cost of goods sold / Inventory

Inventory Turnover in “times,” 2015

= $ 52,000,000 / $ 11,000,000

= 4.73 Times

Inventory Turnover in “days” 2015

= 365 Days / 4.73 Times

= 77.21 Days

Inventory Turnover in “times,” 2014

= $ 44,000,000 / $ 4,400,000

= 10 Times

Inventory Turnover in “days” 2014

= 365 Days / 10 Times

= 36.5 Days