Question

Konami Inc. Ratio Questions (show work) Questions: 1. What is the Current Ratio for 2014 &...

Konami Inc. Ratio Questions

(show work)

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

Homework Answers

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

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