Can I get some help nwith this thanks. Any ideas will be great. Thank you 1) Rio
ID: 2484895 • Letter: C
Question
Can I get some help nwith this thanks.
Any ideas will be great. Thank you
1)
Rio Imports
Information from the financial statements are provided below:
2015
2014
Current Liabilities
$460,000
$320,000
Long-Term Liabilities
240,000
640,000
Stockholders' Equity
840,000
1,080,000
Net Cash Flows from Operating Activities
160,000
102,000
Interest and Principal Payments
24,000
16,000
Net Sales
950,000
900,000
Net Income
180,000
144,000
Interest Expense
17,000
23,000
Income Taxes
32,000
29,000
Dividends Paid to Common Stockholders
30,000
60,000
Refer to Rio Imports. The net profit margin percentage for 2015 is:
a. 18.95%
b. 16.00%
c. 24.11%
d. 14.32%
Bottom of Form
Top of Form
2)
Rio Imports
Information from the financial statements are provided below:
2015
2014
Current Liabilities
$460,000
$320,000
Long-Term Liabilities
240,000
640,000
Stockholders' Equity
840,000
1,080,000
Net Cash Flows from Operating Activities
160,000
102,000
Interest and Principal Payments
24,000
16,000
Net Sales
950,000
900,000
Net Income
180,000
144,000
Interest Expense
17,000
23,000
Income Taxes
32,000
29,000
Dividends Paid to Common Stockholders
30,000
60,000
Refer to Rio Imports. The net profit margin percentage for 2015 is:
a. 18.95%
b. 16.00%
c. 24.11%
d. 14.32%
3)
A company reported the following amounts in its financial statements:
2015
2014
Average inventory
$100,000
$60,000
Cost of goods sold
2,000,000
1,500,000
From 2014 to 2015, the company's efficiency in managing inventory was:
a. Improving, because the inventory turnover ratio is decreasing.
b. Declining, because the inventory turnover ratio is decreasing.
c. Improving, because the inventory turnover ratio is increasing.
d. Declining, because the inventory turnover ratio is increasing.
4)
When a financial analyst determines the percentage change in operating income for the five-year period from 2011 to 2015, she is performing a:
a. Vertical analysis.
b. Time series analysis.
c. Cross-sectional analysis.
d. Profitability analysis.
Bottom of Form
Rio Imports
Information from the financial statements are provided below:
2015
2014
Current Liabilities
$460,000
$320,000
Long-Term Liabilities
240,000
640,000
Stockholders' Equity
840,000
1,080,000
Net Cash Flows from Operating Activities
160,000
102,000
Interest and Principal Payments
24,000
16,000
Net Sales
950,000
900,000
Net Income
180,000
144,000
Interest Expense
17,000
23,000
Income Taxes
32,000
29,000
Dividends Paid to Common Stockholders
30,000
60,000
Explanation / Answer
Answer:1
Net profit margin = Net profit (Net income)/Net sales
Net profit margin % for Rio Imports in 2015 is: 180000/950000 = 18.95%
Answer:2
Net profit margin = Net profit (Net income)/Net sales
Net profit margin % for Rio Imports in 2015 is: 180000/950000 = 18.95%
Answer:3
Inventory turnover ratio = COGS/ Average inventory
Calculation of inventory turnover ratio:
2014:1500000/60000 = 25 times
2015:2000000/100000 = 20 times
Inventory turnover ratio indicated how much inventory is sold over a period of time.A high inventory turnover ratio means more sales are generated given the certain amount of inventory.Since the inventory turnover ratio is decreasing form 2014 to 2015, it indicates the company's efficiency in managing inventory was declining.
So, option 2 is the correct answer.
Answer:4
When a financial analyst determines the percentage change in operating income for the five-year period from 2011 to 2015, she is performing a profitability analysis. As profitability analysis provides a comprehensive measure of a company's profitability on a historical basis 3- 5 years.
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