Question : 195.Financial information for Sigma Company presented below. Calculate the following : 1258436

 

195.Financial information for Sigma Company is presented below. Calculate the following ratios for 2016: (a) Inventory turnover. (b) Accounts receivable turnover. (c) Return on total assets. (d) Times interest earned. (e) Total asset turnover. 

20162015

Assets:

Cash$18,000$22,000

Marketable securities25,0000

Accounts receivable38,00042,000

Inventory61,00052,000

Prepaid insurance6,0009,000

Long-term investments49,00020,000

Plant assets, net    218,000     225,000

Total assets   $415,000    $370,000

Net income$62,250

Sales (all on credit)305,000

Cost of goods sold123,000

Interest expense15,600

Income tax expense27,000

  

196.The following summaries from the income statements and balance sheets of Kouris Company and Brittania, Inc. are presented below. (1) For both companies for 2016, compute the: (a) Current ratio (b) Acid-test ratio (c) Accounts receivable turnover (d) Inventory turnover (e) Days’ sales in inventory (f) Days’ sales uncollected Which company do you consider to be the better short-term credit risk? Explain. (2) For both companies for 2016, compute the: (a) Profit margin ratio (b) Return on total assets (c) Return on common stockholders’ equity Which company do you consider to have better profitability ratios? 

Kouris Company Consolidated Balance Sheets(in millions)

May 31

20162015

Assets

Current assets:

Cash and cash equivalents$634.0$575.5

Accounts receivable, net of allowance2,101.11,804.1

Inventories1,514.91,373.8

Other current assets       429.9        401.3

Total current assets 4,679.9 4,154.7

Property, plant, and equipment, net1,620.81,614.5

Other long term assets        413.2         670.8

Total assets    $6,713.9     $6,440.0

Liabilities and Stockholders’ Equity

Current liabilities:

Current portion of long-term debt$205.7$55.3

Notes payable75.4425.2

Accounts payable572.7504.4

Accrued liabilities1,054.2765.3

Income taxes payable        107.2           83.0

Total current liabilities2,015.21,833.2

Long term liabilities        708.0        767.8

Total liabilities     2,723.2     2,601.0

Stockholders’ equity:

Common stock2.82.8

Contributed capital in excess of par value589.0538.7

Unearned stock compensation(0.6)(5.1)

Accumulated other comprehensive loss(239.7)(192.4)

Retained earnings      3,639.2      3,495.0

Total stockholders’ equity      3,990.7      3,839.0

Total liabilities and stockholders’ equity     $6,713.9     $6,440.0

 

Brittania, Inc.Consolidated Balance Sheets

Jan. 3,2016Jan. 4,2015

Assets

Current assets:

Cash and cash equivalents$34.5$22.2

Accounts receivable, net of allowance15.514.7

Inventories27.228.4

Other current assets         3.5         4.2

Total current assets80.769.5

Property, plant, and equipment, net5.77.0

Other long term assets         1.1         1.5

Total assets      $87.5      $78.0

Liabilities and Stockholders’ Equity

Current liabilities:

Accounts payable$8.5$6.6

Accrued liabilities        7.8       5.6

Total current liabilities16.312.2

Long term liabilities        2.5       2.6

Total liabilities       18.8      14.8

Stockholders’ equity:

Common stock2.32.3

Contributed capital in excess of par value17.817.4

Unearned stock compensation(0.1)(0.5)

Accumulated other comprehensive loss(0.9)(1.3)

Treasury stock(6.3)(5.4)

Retained earnings      55.9      50.7

Total stockholders’ equity      68.7      63.2

Total liabilities and stockholders’ equity     $87.5     $78.0

 

 

 

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