财务报告与分析三友会计名著译丛第11章习题答案Word文件下载.docx

财务报告与分析三友会计名著译丛第11章习题答案Word文件下载.docx

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a.Thecurrentratiohasallcurrentassetsinthenumerator,whileintheacidtestratio,inventoryisremoved.Alargeinventorywouldcausethedeclineintheacid-testratio.Thedeclineintheinventoryturnoversupportsthisconclusion.

b.Financialleverageistheextenttowhichfixedcostsoffinancingareused,namelydebt.Thegreaterthefinancialleverage,thegreaterthemagnificationofchangesinearnings.Themeasuresofdebt,asindicatedbytotaldebttototalassetsandlongtermdebttototalassets,havedeclined.Thisincreasesfinancialleverage.However,thefirmdoeshaveleverageandthedeclineinprofittoshareholdersismagnifiedbyit.

c.Thefixedassetturnoverhasrisen,generallyindicatingeitherariseinsalesoradeclineinfixedassets.Salesasapercentof2002salesaregiven.Assume2002saleswere$100;

2003,$103,and2004,$106.

If$100/fixedassets=1.75,thenfixedassets=$57in2002

If$103/fixedassets=1.88,thenfixedassets=$55in2003

If$106/fixedassets=1.99,thenfixedassets=$53in2004

Therehasactuallybeenaslightdeclineinnetfixedassets.

PROBLEM114

a.1.RateofReturnonTotalAssets:

NetIncomeBefore

MinorityShareOf

EarningsAndNonrecurring

Items=-$.2=（-1.0%）

AverageTotalAssets（$19.7+19.4）÷

2Negative

Therateofreturnontotalassetsisnegativein2004,duetothenegativenetincomefigure.

2.Acid-TestRatio:

CashEquivalents+Marketable

Securities+NetReceivables=$13.5-$2.8-$.6=1.09

CurrentLiabilities$9.3

3.ReturnonSales:

NetIncomeBeforeMinority

ShareOfEarningsAnd

NonrecurringItems=$-.2=（-.8%）Negative

NetSales$24.9

4.CurrentRatio:

5.InventoryTurnover:

b.1.RateOfReturnOnTotalAssets:

UnfavorableTherateislowandhasbeendeclining.

2.ReturnonSales:

3.Acid-TestRatio:

FavorableThedirectionofchangeisunfavorable,butitisprobablymorethanadequate.

4.CurrentRatio:

UnfavorableThedeclinehasbeensharp,andtheratioisprobablytoolow.

NeutralInventoryturnoverhasbeenfairlyconstant,andwedon'

tknowenoughaboutthebusinesstodetermineiftheturnoverisadequate.

6.EquityRelationships:

UnfavorableThetrendtowardsaheavyrelianceoncurrentliabilitiesisunfavorable.Thishighproportionofcurrentliabilitiescouldresultinshorttermliquidityproblems.

7.AssetRelationships:

NeutralThereductionintheproportionofassetsthatarecurrentcouldindicatethatthefirmisworkingitscurrentassetsharder.Thereductionintheproportionofassetsthatarecurrentcouldalsoindicatethattherehasbeenanexpansioninproperty,plant,andequipment,withoutanadequateincreaseincurrentassets.

c.Thefactsavailablefromtheproblemareinadequatetomakefinaljudgment;

additionalinformationaslistedinPartDwouldbenecessary.However,thefactsgivendonotpresentanoverallgoodpictureofD.Hawk.Thecompanydoesn'

tappeartobeinserioustroubleatthemoment,butmostofthetrendsreflectedinfiguresareunfavorable.Thecompanyappearstobedevelopingliquidityproblems:

1.Cashandsecuritiesaredeclining.

2.Inventoriesandplantandequipmentareanincreasingportionoftheassets.

3.Currentliabilitiesareanincreasingportionofcapital.

Theoperationsofthecompanyalsoshowunfavorabletrends:

1.Costofgoodssoldisincreasingasapercentofsales.

2.Administrativeexpensesareincreasingasapercentofsales.

3.Recognizingthatpriceshaverisen,itappearsthatphysicalvolumeatD.Hawkmighthaveactuallydecreased.

OnthebasisoftheseobservationsandthefactthatD.Hawk

wouldbeaverylargecustomer（thusapotentiallylargelossiftheaccountsbecomeuncollectible）,creditshouldbeextendedtoD.Hawkonlyundercarefullycontrolledandmonitoredconditions.

d.Additionalinformationwouldbe:

1.QualityofmanagementofD.HawkCompany.

2.ThelocationsoftheD.Hawkstores.

3.ThecurrentactivitiesofD.Hawk,whichhaveincreasedplantandequipmentbutnotinventories.

4.IndustrypositionofD.HawkCompany.

5.CreditratingoftheD.HawkCompany.

6.Currenteconomicconditions.

7.CapacityofL.KonrathCompanytohandlesuchalargesingleaccount.

8.Normalratiosfortheindustry.

PROBLEM115

a.

LiquidityRatios:

1.Days'

SalesinInventory=EndingInventory

CostOfGoodsSold/365

2.MerchandiseInventoryTurnover=Costofgoodssold

Averageinventory

3.InventoryTurnoverinDays=AverageInventory

4.OperatingCycle=AccountsReceivable+InventoryTurnover

TurnoverinDaysinDays

AccountsReceivable=AverageGrossReceivables

TurnoverinDaysNetSales/365

（$99,021+$750+$83,575+$750）/2=

$578,530/365

58.07days+50.92days=108.99days

5.WorkingCapital=CurrentAssetsCurrentLiabilities

$227,615$73,730=$153,885

6.CurrentRatio=CurrentAssets

CurrentLiabilities

$227,615=3.09

$73,730

7.Acid-TestRatio=

$64,346+$99,021=2.22

$73,730

8.CashRatio=CashEquivalents+MarketableSecurities

$64,346=.87

Debt:

1.DebtRatio=

2.Debt/Equity=TotalLiabilities

Shareholders'

Equity

3.TimesInterestEarned=

Profitability:

1.NetProfitMargin=NetIncomeBeforeMinority

NonrecurringItems

NetSales

$23,018=3.98%

$578,530

2.TotalAssetTurnover=NetSales

AverageTotalAssets

$578,530$578,530=1.74timesperyear

（$370,264+$295,433）/2=$332,848.5

3.ReturnonAssets=

4.ReturnonTotalEquity=

b.Approximateincomefor2004ifinventoryhadbeenvaluedat

approximatecurrentcost:

2004netincomeasreported$23,018

Netdecreaseininventoryreserve

2004$35,300

200341,100

（a）$5,800

（b）Effectivetaxrate36.6%

（c）Decreaseintaxes（a）x（b）$2,123

（d）Netdecreaseinincome

[（a）（c）]

$5,800$2,123（3,677）

Approximateincomefor2004ifinventoryhad

beenvaluedatapproximatecurrentcost$19,341

Inventoryadjusted:

Asdisclosedonthebalancesheet$63,414

Increaseininventory35,300

$98,714

Deferredcurrenttaxliability:

Increaserelatedtoinventoryreserve

$35,300x36.6%=12,920

Retainedearningsadjusted:

Asdisclosedonthebalancesheet$154,084

（$35,300x36.6%）22,380

$176,464

Liquidity:

1.Days’SalesInInventory

$63,414+$35,300=$98,714=72.69days

$495,651/365$1,357.95

2.MerchandiseInventoryTurnover

$495,651$495,651

（$63,414+$35,300+$74,890+$41,100）/2=$107,352

=4.62timesperyear

3.InventoryTurnoverInDays

4.OperatingCycle

58.07days+79.05days=137.12days

5.WorkingCapital

（$227,615+$35,300）（$73,730+$12,920）*=$176,265

*$35,300X36.6%=$12,920

6.CurrentRatio

$262,915=3.03

$86,650

7.Acid-TestRatio

$64,346+$99,021=$163,367=1.89

$73,730+$12,920$86,650

8.CashRatio

$64,346$64,346=.74

$73,730+$12,920=$86,650

1.DebtRatio

2.Debt/Equity

3.TimesInterestEarned

1.NetProfitMargin

2.TotalAssetTurnover

$578,530=

（$370,264+$295,433+$35,300+$41,100）/2

3.ReturnOnAssets

$23,018$3,677

$19,341=5.21%

$371,049

4.ReturnOnTotalEquity

$19,341

（$198,084+$175,583+$22,380+$28,482*）/2

*$41,100x（130.7%）

$41,100x69.30%=$28,482.30

$19,341=9.11%

$212,265

c.

Ratio

Withoutconsidering

theLIFOreserve

Considering

theLIFOreserve

Liquidity:

Days’salesininventory

Merchandiseinventory

turnover

Inventoryturnoverindays

Operatingcycle

Workingcapital

Currentratio

Acid-testratio

Cashratio

Debt:

Debtratio

Debt/equity

Timesinterestearned

Profitability:

Netprofitmargin

Totalasset