Condensed income statement wileyplus

Exercise 14-4

Operating data for Joshua Corporation are presented below.

2020

2019

Sales revenue

$746,000

$595,000

Cost of goods sold

467,742

395,080

Selling expenses

118,614

76,755

Administrative expenses

60,426

57,715

Income tax expense

32,078

24,990

Net income

67,140

40,460

Prepare a schedule showing a vertical analysis for 2020 and 2019. (Round answers to 1 decimal place, e.g. 48.5%.)

JOSHUA CORPORATION Condensed Income Statements For the Years Ended December 31

2020

2019

Amount

Percent

Amount

Percent

Sales revenue

$746,000

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%

$595,000

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%

Cost of goods sold

467,742

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%

395,080

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%

Gross profit

278,258

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%

199,920

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%

Selling expenses

118,614

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%

76,755

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%

Administrative expenses

60,426

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%

57,715

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%

Total operating expenses

179,040

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%

134,470

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%

Income before income taxes

99,218

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%

65,450

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%

Income taxes expense

32,078

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%

24,990

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%

Net income

$67,140

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%

$40,460

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%

Exercise 14-7

Nordstrom, Inc. operates department stores in numerous states. Suppose selected financial statement data (in millions) for 2020 are presented below.

End of Year

Beginning of Year

Cash and cash equivalents

$ 1,017

$ 94

Accounts receivable (net)

2,600

2,500

Inventory

1,200

1,200

Other current assets

423

394

Total current assets

$5,240

$4,188

Total current liabilities

$2,620

$2,081

For the year, net credit sales were $10,710 million, cost of goods sold was $6,960 million, and net cash provided by operating activities was $1,272 million. Compute the current ratio, accounts receivable turnover, average collection period, inventory turnover, and days in inventory at the end of the current year. (Round answers to 1 decimal place, e.g. 1.6.)

Current ratio

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:1

Accounts receivable turnover

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times

Average collection period

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days

Inventory turnover

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times

Days in inventory

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days

Exercise 14-11

Here is the income statement for Myers, Inc.

Myers, Inc. Income Statement For the Year Ended December 31, 2020

Sales revenue

$430,000

Cost of goods sold

200,000

Gross profit

230,000

Expenses (including $10,000 interest and $23,000 income taxes)

96,000

Net income

$ 134,000

Additional information:

1.

Common stock outstanding January 1, 2020, was 16,000 shares, and 24,000 shares were outstanding at December 31, 2020.

2.

The market price of Myers stock was $11.43 in 2020.

3.

Cash dividends of $28,140 were paid, $7,000 of which were to preferred stockholders.

Compute the following measures for 2020. (Round Earnings per share to 2 decimal places, e.g. 1.65, and all other answers to 1 decimal place, e.g. 6.8 or 6.8%.)

(a)

Earnings per share

$

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(b)

Price-earnings ratio

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times

(c)

Payout ratio

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%

(d)

Times interest earned

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times

Problem 14-5A a

Suppose selected financial data of Target and Wal-Mart for 2020 are presented here (in millions).

Target Corporation

Wal-Mart Stores, Inc.

Income Statement Data for Year

Net sales

$65,357

$408,214

Cost of goods sold

45,583

304,657

Selling and administrative expenses

15,101

79,607

Interest expense

707

2,065

Other income (expense)

(94)

(411)

Income tax expense

1,384

7,139

Net income

$ 2,488

$ 14,335

Balance Sheet Data (End of Year)

Current assets

$18,424

$48,331

Noncurrent assets

26,109

122,375

Total assets

$44,533

$170,706

Current liabilities

$11,327

$55,561

Long-term debt

17,859

44,089

Total stockholders’ equity

15,347

71,056

Total liabilities and stockholders’ equity

$44,533

$170,706

Beginning-of-Year Balances

Total assets

$44,106

$163,429

Total stockholders’ equity

13,712

65,682

Current liabilities

10,512

55,390

Total liabilities

30,394

97,747

Other Data

Average net accounts receivable

$7,525

$4,025

Average inventory

6,942

33,836

Net cash provided by operating activities

5,881

26,249

Capital expenditures

1,729

12,184

Dividends

496

4,217

(a) For each company, compute the following ratios. (Enter free cash flow in millions. Round Current ratio to 2 decimal places, e.g. 1.67. Round Debt to assets ratio to 0 decimal places, e.g. 18 or 18%. Round all other answers to 1 decimal place, e.g. 1.6, or 1.6%. Use 365 days for calculation.)

Ratio

Target

Wal-Mart

(1)

Current ratio

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:1

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:1

(2)

Accounts receivable turnover

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times

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times

(3)

Average collection period

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days

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days

(4)

Inventory turnover

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times

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times

(5)

Days in inventory

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days

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days

(6)

Profit margin

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%

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%

(7)

Asset turnover

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times

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times

(8)

Return on assets

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%

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%

(9)

Return on common stockholders’ equity

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%

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%

(10)

Debt to assets ratio

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%

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%

(11)

Times interest earned

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times

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times

(12)

Free cash flow

$

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million

$

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million