Question

Based on your review of the financial statements, would you invest in this company? Why or...

Based on your review of the financial statements, would you invest in this company? Why or why not? Detail your decision-making process.Based on your review of the financial statements, would you invest in this company? Why or why not? Detail your decision-making process.

From the Table of Contents, select Financial Statements and Supplementary Data. Use the (Consolidated) Income Statement to answer the following:

What was the company’s total sales revenue for the most recent year? What was their cost of goods sold?   What was their gross profit? Calculate their gross profit percentage. Show calculations.

Most recent year is Dec 31, 2017.

Total sales revenue of the year 2017 is $177,866.

Cost of the goods sold of the year 2017 is $111,934.

Gross profit of the year 2017 = Total sales revenue - Cost of goods sold

= $177,866 - $111,934

= $65,932

Gross profit percentage of the year 2017 = (Gross profit / Total sales revenue) ×100

= ($65,932 / $177,866) ×100

= 37.07%

From the Table of Contents, select Financial Statements and Supplementary Data. Use the (Consolidated) Balance Sheet to answer the following:

Total assets for the most recent date (Dec 31, 2017) is $131,310.

Total liabilities for the most recent date (Dec 31, 2017) is $103,601.

Working note:

Total liabilties = Total current liabilities + Long term debt + Other long-term liabilities

= $57,883 + $24,743 + $20,975

= $103,601

Homework Answers

Answer #1

On the Basis of Given Data to Review of Financial Statements, while having the decision that whether to invest or not it can be seen that the company is having a high gross profit ratio i.e. 37.07% that is good as the company seems to be having high profitability to sustain in the Competitive Environment, further any more decision can be concluded by looking to Indirect Expenses of the Company

Also, it can be seen that The Equity of the Company is Rs-27709/-(131310-103601) and the Debt of the Company are Rs-45718/-(24743+20975), on calculating the debt-equity ratio it comes to 1.64:1 which is high than the normal debt equity of 1:1

Although the Company has having a high debt-equity ratio compared to the industry average, the gross profit ratio is a bit high to observe the Interest Exp. so it can be concluded that the Company is Good in Investing for Long Term

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Review of Financial Ratios In its closing financial statements for its first year in business, the...
Review of Financial Ratios In its closing financial statements for its first year in business, the Runs and Goses Company, had cash of $242, accounts receivable of $850, inventory of $820, net fixed assets of $3,408, accounts payable of $700, short-term notes payable of $740, long-term liabilities of $1,100, common stock of $1,160, retained earnings of $1,620, net sales of $2,768, cost of goods sold of $1,210, depreciation of $360, interest expense of $160, taxes of $312, addition to retained...
Selected comparative financial statements of Korbin Company follow. KORBIN COMPANY Comparative Income Statements For Years Ended...
Selected comparative financial statements of Korbin Company follow. KORBIN COMPANY Comparative Income Statements For Years Ended December 31, 2017, 2016, and 2015 2017 2016 2015 Sales $ 555,000 $ 340,000 $ 278,000 Cost of goods sold 283,500 212,500 153,900 Gross profit 271,500 127,500 124,100 Selling expenses 102,900 46,920 50,800 Administrative expenses 50,668 29,920 22,800 Total expenses 153,568 76,840 73,600 Income before taxes 117,932 50,660 50,500 Income taxes 40,800 10,370 15,670 Net income $ 77,132 $ 40,290 $ 34,830    KORBIN...
Review the financial statements for Jones Inc. and the comparative financial ratios for the year-end review....
Review the financial statements for Jones Inc. and the comparative financial ratios for the year-end review. Enter your calculations and written analysis directly into the template, and show or explain your work where appropriate. Problem 1. Calculate the firm's 2015 financial ratios for liquidity, activity (asset management), leverage (debt), and profitability. Problem 2. Analyze the firm's performance from both time-series and cross-sectional points of view using the key financial ratios provided in the template. Problems 1 and 2 BALANCE SHEET...
Use the statements below to answer the questions that follow: Income Statement for the Year Ended,...
Use the statements below to answer the questions that follow: Income Statement for the Year Ended, December 31, 2017 Sales 150,000 Expenses Cost of Goods Sold 80,000 Operating Expenses 30,000 EBIT (aka Operating Profit) 40,000 Interest 8,000 Income Tax 13,000 Total Expenses 131,000 Net Operating Income 19,000 Other Income Gain on Sale of Equipment 10,000 Net income 29,000 Balance Sheet 31-Dec-17 31-Dec-16 Assets Current Assets Cash 95,000 78,000 Accounts Receivable 60,000 82,000 Finished Goods 25,000 50,000 Materials Inventory 110,000 80,000...
Selected comparative financial statements of Korbin Company follow. KORBIN COMPANY Comparative Income Statements For Years Ended...
Selected comparative financial statements of Korbin Company follow. KORBIN COMPANY Comparative Income Statements For Years Ended December 31, 2019, 2018, and 2017 2019 2018 2017 Sales $ 385,229 $ 295,117 $ 204,800 Cost of goods sold 231,908 185,924 131,072 Gross profit 153,321 109,193 73,728 Selling expenses 54,703 40,726 27,034 Administrative expenses 34,671 25,970 16,998 Total expenses 89,374 66,696 44,032 Income before taxes 63,947 42,497 29,696 Income tax expense 11,894 8,712 6,028 Net income $ 52,053 $ 33,785 $ 23,668 KORBIN...
Earnings per Share The following financial data is from Hi-Tech Instruments' financial statements (thousands of dollars,...
Earnings per Share The following financial data is from Hi-Tech Instruments' financial statements (thousands of dollars, except earnings per share.) 2016 Sales revenue $210,000 Cost of goods sold 125,000 Net income 9,100 Dividends 3,400 Earnings per share 4.55 Hi-Tech Instruments, Inc. Balance Sheet (Thousands of Dollars) Dec. 31, 2016 Dec. 31, 2015 Assets Cash $18,300 $18,000 Accounts receivable (net) 46,000 41,000 Inventory 39,500 43,700 Total current assets 103,800 102,700 Plant assets (net) 52,600 50,500 Other assets 15,600 13,800 Total assets...
6. Selected financial statement information for Textile Co. appears below: Balance Sheet accounts Jan. 1, 2017...
6. Selected financial statement information for Textile Co. appears below: Balance Sheet accounts Jan. 1, 2017 Dec. 31, 2017 Inventory $210,000 $340,000 Accounts Receivable $85,000 $43,000 Income Statement (partial) For the year ended Dec. 31, 2017 Sales $824,000 Cost of Goods Sold ($658,000) Gross Profit $166,000 (1). Calculate the amount of cash collected from customers. (2). Calculate the amount of cash spent on inventory for 2017 by Textile Co.
Selected comparative financial statements of Korbin Company follow. KORBIN COMPANY Comparative Income Statements For Years Ended...
Selected comparative financial statements of Korbin Company follow. KORBIN COMPANY Comparative Income Statements For Years Ended December 31, 2019, 2018, and 2017 2019 2018 2017 Sales $ 385,229 $ 295,117 $ 204,800 Cost of goods sold 231,908 185,924 131,072 Gross profit 153,321 109,193 73,728 Selling expenses 54,703 40,726 27,034 Administrative expenses 34,671 25,970 16,998 Total expenses 89,374 66,696 44,032 Income before taxes 63,947 42,497 29,696 Income tax expense 11,894 8,712 6,028 Net income $ 52,053 $ 33,785 $ 23,668 KORBIN...
Selected comparative financial statements of Korbin Company follow: KORBIN COMPANY Comparative Income Statements For Years Ended...
Selected comparative financial statements of Korbin Company follow: KORBIN COMPANY Comparative Income Statements For Years Ended December 31, 2017, 2016, and 2015 2017 2016 2015 Sales $ 459,340 $ 351,892 $ 244,200 Cost of goods sold 276,523 222,396 156,288 Gross profit 182,817 129,496 87,912 Selling expenses 65,226 48,561 32,234 Administrative expenses 41,341 30,966 20,269 Total expenses 106,567 79,527 52,503 Income before taxes 76,250 49,969 35,409 Income taxes 14,183 10,244 7,188 Net income $ 62,067 $ 39,725 $ 28,221 KORBIN COMPANY...
The following is summary of information presented on the financial statements of a company on December...
The following is summary of information presented on the financial statements of a company on December 31, 2015. Account 2015 2014 Current Assets $65,000 $50,000 Accounts Receivable 80,000 75,000 Merchandise Inventory 50,000 40,000 Current Liabilities 75,000 50,000 Long-term Liabilities 30,000 50,000 Common Stock 50,000 40,000 Retained Earnings 40,000 25,000 ​ ​ ​ Net Sales Revenue $525,000 $500,000 Cost of Goods Sold 400,000 395,000 Gross Profit $125,000 $105,000 Selling Expenses 45,000 50,000 Net income before income tax expense $80,000 $55,000 Income...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT