SHOW HOW RATIOS WERE CALCULATED To Do A. Horizantal Analysis for BS B. Ratio ana
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Question
SHOW HOW RATIOS WERE CALCULATED To Do A. Horizantal Analysis for BS B. Ratio analysis ANSWER Data in other tabs. Do year for HW for 2xx3 Current ratio Acid/Quick Ratio A/R turnover [ assume all sales are credit sales] Inventory turnover Debt ratio Debt to Equity Times interest earned Net income % Return on assets [ROI] PE ratio [ use share price of $35.00] Earnings per share [undiluted] RO Equity Compute:ééé ClassCo INTERNATIONAL LTD. CONSOLIDATED STATEMENTS OF OPERATIONS Years Ended September 25,2xx3, September 26, 2xx2 and September 28, 2xx1 (in millions, except per share data) 2xx3 2xx2 2xx1 Revenue from product sales $ 11,000 13,000 12,000 Service revenue 6,755 7,135 6,661 Total Net revenue 17,755 20,135 18,661 Cost of product sales & services 9,000 13,000 12,000 Selling, general and administrative expenses 4,657 4,906 4,776 Operating Income 4,098 2,229 1,885 Interest income 44 110 104 Interest expense (301) (396) (313) Income tax expense (78) (335) (324) (Loss) income from continuing operations 3,763 1,608 1,352 Net (loss) income $ 3,763 1,608 1,352 use tax rate of 30% Weighted-average number of shares outstanding: millions /Basic /common shares 473 484 495 ClassCo INTERNATIONAL LTD. CONSOLIDATED BALANCE SHEETS As of September 25, 2xx3 and September 26, 2xx2 (in millions, except share data) 2xx3 2xx2 Assets Current Assets: Cash and cash equivalents 2,000 1,500 Accounts receivable, less allowance for doubtful accounts of $173 and $173, respectively 2,629 2,986 Inventories 1,443 1,877 Prepaid expenses and other current assets 972 1,238 Deferred income taxes 400 600 Total current assets 7,444 8,201 Property, plant and equipment, net 3,500 3,600 Goodwill 8,791 11,619 Intangible assets, net 2,647 2,681 Other assets 2,651 2,582 Total Assets 25,553 28,804 Liabilities and Shareholders' Equity Current Liabilities: Loans payable and current maturities of long-term debt 234 586 Accounts payable 1,244 1,608 Accrued and other current liabilities 2,500 2,700 Deferred revenue 590 594 Liabilities held for sale 161 211 Total current liabilities 4,729 5,699 Long-term debt 4,029 3,709 Deferred revenue 1,134 1,187 Other liabilities 2,720 2,715 Total Liabilities 12,612 13,310 Total Shareholders' Equity 12,941 15,494 Total Liabilities and Shareholders' Equity 25,553 28,804 check 0 0SHOW HOW RATIOS WERE CALCULATED To Do A. Horizantal Analysis for BS B. Ratio analysis ANSWER Data in other tabs. Do year for HW for 2xx3 Current ratio Acid/Quick Ratio A/R turnover [ assume all sales are credit sales] Inventory turnover Debt ratio Debt to Equity Times interest earned Net income % Return on assets [ROI] PE ratio [ use share price of $35.00] Earnings per share [undiluted] RO Equity Compute:ééé ClassCo INTERNATIONAL LTD. CONSOLIDATED STATEMENTS OF OPERATIONS Years Ended September 25,2xx3, September 26, 2xx2 and September 28, 2xx1 (in millions, except per share data) 2xx3 2xx2 2xx1 Revenue from product sales $ 11,000 13,000 12,000 Service revenue 6,755 7,135 6,661 Total Net revenue 17,755 20,135 18,661 Cost of product sales & services 9,000 13,000 12,000 Selling, general and administrative expenses 4,657 4,906 4,776 Operating Income 4,098 2,229 1,885 Interest income 44 110 104 Interest expense (301) (396) (313) Income tax expense (78) (335) (324) (Loss) income from continuing operations 3,763 1,608 1,352 Net (loss) income $ 3,763 1,608 1,352 use tax rate of 30% Weighted-average number of shares outstanding: millions /Basic /common shares 473 484 495 ClassCo INTERNATIONAL LTD. CONSOLIDATED BALANCE SHEETS As of September 25, 2xx3 and September 26, 2xx2 (in millions, except share data) 2xx3 2xx2 Assets Current Assets: Cash and cash equivalents 2,000 1,500 Accounts receivable, less allowance for doubtful accounts of $173 and $173, respectively 2,629 2,986 Inventories 1,443 1,877 Prepaid expenses and other current assets 972 1,238 Deferred income taxes 400 600 Total current assets 7,444 8,201 Property, plant and equipment, net 3,500 3,600 Goodwill 8,791 11,619 Intangible assets, net 2,647 2,681 Other assets 2,651 2,582 Total Assets 25,553 28,804 Liabilities and Shareholders' Equity Current Liabilities: Loans payable and current maturities of long-term debt 234 586 Accounts payable 1,244 1,608 Accrued and other current liabilities 2,500 2,700 Deferred revenue 590 594 Liabilities held for sale 161 211 Total current liabilities 4,729 5,699 Long-term debt 4,029 3,709 Deferred revenue 1,134 1,187 Other liabilities 2,720 2,715 Total Liabilities 12,612 13,310 Total Shareholders' Equity 12,941 15,494 Total Liabilities and Shareholders' Equity 25,553 28,804 check 0 0
Explanation / Answer
ClassCo INTERNATIONAL LTD.
CONSOLIDATED BALANCE SHEETS
As of September 25, 2xx3 and September 26, 2xx2
(in millions, except share data)
horizontal analysis
2xx2
2xx3
Assets
Change in Value (dollar value) = (2013-2012)
% change in value = change in value(dollare)/2012 figures
Current Assets:
Cash and cash equivalents
1,500
2,000
500
33.33%
Accounts receivable, less allowance for doubtful accounts of $173 and $173, respectively
2,986
2,629
-357
-11.96%
Inventories
1,877
1,443
-434
-23.12%
Prepaid expenses and other current assets
1,238
972
-266
-21.49%
Deferred income taxes
600
400
-200
-33.33%
Total current assets
8,201
7,444
-757
-9.23%
Property, plant and equipment, net
3,600
3,500
-100
-2.78%
Goodwill
11,619
8,791
-2,828
-24.34%
Intangible assets, net
2,681
2,647
-34
-1.27%
Other assets
2,582
2,651
69
2.67%
Total Assets
28,804
25,553
-3,251
-11.29%
Liabilities and Shareholders' Equity
Current Liabilities:
Loans payable and current maturities of long-term debt
586
234
-352
-60.07%
Accounts payable
1,608
1,244
-364
-22.64%
Accrued and other current liabilities
2,700
2,500
-200
-7.41%
Deferred revenue
594
590
-4
-0.67%
Liabilities held for sale
211
161
-50
-23.70%
Total current liabilities
5,699
4,729
-970
-17.02%
Long-term debt
3,709
4,029
320
8.63%
Deferred revenue
1,187
1,134
-53
-4.47%
Other liabilities
2,715
2,720
5
0.18%
Total Liabilities
13,310
12,612
-698
-5.24%
Total Shareholders' Equity
15,494
12,941
-2,553
-16.48%
Total Liabilities and Shareholders' Equity
28,804
25,553
-3,251
-11.29%
check
0
0
Ratio analysis
current ratio = current assets/current liabilities
7444/4729
1.574117
current assets
7,444
current liabilities
4,729
quick ratio = quick assets/current liabilities
5029/4729
1.063438
quick assets = current assets-inventories-prepaid
7444-1443-972
5029
current liabilities
4,729
Accounts receivables turnover ratio = sales/avaerage accounts receivable
17755/2807.5
6.324132
total net revenue
17755
average accounts receivables
(opening + closing) /2
(2986+2629)/2
2807.5
Inventory turnover = cost of product sale and servire/average inventory
9000/1665
5.405405
cost of product sale and service
9000
average inventory
(opening + closing) /2
(1443+1887)/2
1665
Debt ratio = total of liabilities / total of shareholders equity
49.36%
total of liabilities
12,612
total of assets
25,553
Debt to equity ratio
total of liabilities/total of equity
1.974577
total of liabilities
25,553
total of equity
12,941
Times interest earned = EBIT/interest
ebit/interest
93.13636
EBIT
4098
Interest
44
net income = net income/total of net revenue
21.19%
net income
3763
total of net revenue
17755
return on assets = net income/average total assets
13.85%
net income
3763
average total assets
(28804+25553)/2
27178.5
PE ratio = market price/eps
35/7.955603
4.399415
eps = net income/weighted average no of shares
3763/473
7.955603
market price
35
eps = net income/weighted average no of shares
3763/473
7.955603
RO equity = net income/average equity
3763/14217.5
26.47%
net income
3763
average equity
(15494+12941)/2
14217.5
ClassCo INTERNATIONAL LTD.
CONSOLIDATED BALANCE SHEETS
As of September 25, 2xx3 and September 26, 2xx2
(in millions, except share data)
horizontal analysis
2xx2
2xx3
Assets
Change in Value (dollar value) = (2013-2012)
% change in value = change in value(dollare)/2012 figures
Current Assets:
Cash and cash equivalents
1,500
2,000
500
33.33%
Accounts receivable, less allowance for doubtful accounts of $173 and $173, respectively
2,986
2,629
-357
-11.96%
Inventories
1,877
1,443
-434
-23.12%
Prepaid expenses and other current assets
1,238
972
-266
-21.49%
Deferred income taxes
600
400
-200
-33.33%
Total current assets
8,201
7,444
-757
-9.23%
Property, plant and equipment, net
3,600
3,500
-100
-2.78%
Goodwill
11,619
8,791
-2,828
-24.34%
Intangible assets, net
2,681
2,647
-34
-1.27%
Other assets
2,582
2,651
69
2.67%
Total Assets
28,804
25,553
-3,251
-11.29%
Liabilities and Shareholders' Equity
Current Liabilities:
Loans payable and current maturities of long-term debt
586
234
-352
-60.07%
Accounts payable
1,608
1,244
-364
-22.64%
Accrued and other current liabilities
2,700
2,500
-200
-7.41%
Deferred revenue
594
590
-4
-0.67%
Liabilities held for sale
211
161
-50
-23.70%
Total current liabilities
5,699
4,729
-970
-17.02%
Long-term debt
3,709
4,029
320
8.63%
Deferred revenue
1,187
1,134
-53
-4.47%
Other liabilities
2,715
2,720
5
0.18%
Total Liabilities
13,310
12,612
-698
-5.24%
Total Shareholders' Equity
15,494
12,941
-2,553
-16.48%
Total Liabilities and Shareholders' Equity
28,804
25,553
-3,251
-11.29%
check
0
0
Ratio analysis
current ratio = current assets/current liabilities
7444/4729
1.574117
current assets
7,444
current liabilities
4,729
quick ratio = quick assets/current liabilities
5029/4729
1.063438
quick assets = current assets-inventories-prepaid
7444-1443-972
5029
current liabilities
4,729
Accounts receivables turnover ratio = sales/avaerage accounts receivable
17755/2807.5
6.324132
total net revenue
17755
average accounts receivables
(opening + closing) /2
(2986+2629)/2
2807.5
Inventory turnover = cost of product sale and servire/average inventory
9000/1665
5.405405
cost of product sale and service
9000
average inventory
(opening + closing) /2
(1443+1887)/2
1665
Debt ratio = total of liabilities / total of shareholders equity
49.36%
total of liabilities
12,612
total of assets
25,553
Debt to equity ratio
total of liabilities/total of equity
1.974577
total of liabilities
25,553
total of equity
12,941
Times interest earned = EBIT/interest
ebit/interest
93.13636
EBIT
4098
Interest
44
net income = net income/total of net revenue
21.19%
net income
3763
total of net revenue
17755
return on assets = net income/average total assets
13.85%
net income
3763
average total assets
(28804+25553)/2
27178.5
PE ratio = market price/eps
35/7.955603
4.399415
eps = net income/weighted average no of shares
3763/473
7.955603
market price
35
eps = net income/weighted average no of shares
3763/473
7.955603
RO equity = net income/average equity
3763/14217.5
26.47%
net income
3763
average equity
(15494+12941)/2
14217.5
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