Caseys Corp, known for pizza, had net income in 2011 of $160,000. Here are some of the financial ratios from the annual report.
Profit Margin 12%
Return on Assets 20%
Debt to Assets Ratio 55%
Using these ratios, calculate the following for Caseys Corp:
a) Sales
b) Total assets
c) Total asset turnover
d) Total debt
e) Stockholders' equity
f) Return on equity
Caseys Corp, known for pizza, had net income in 2011 of $160,000. Here are some of the financial ratios from the annual report.
Profit Margin 12%
Return on Assets 20%
Debt to Assets Ratio 55%
Using these ratios, calculate the following for Caseys Corp:
a) Sales
b) Total assets
c) Total asset turnover
d) Total debt
e) Stockholders' equity
f) Return on equity
Related questions
Using this information, compare the similarities and differences in Debt Financing and Equity Financing. These ratios are calculated based on the annual statements.
| Verizon | U.S. Cellular | ||||
| 2015 | 2014 | 2015 | 2014 | ||
| Profit Margin | % | 13.96 | 9.4 | 5.07 | -1.21 |
| Net Income/Sales | |||||
| Return on Assets (Investment) | % | 7.51 | 5.13 | 2.7 | -0.72 |
| A) Net Income/Total Assets | |||||
| B) Net income/Sales X Sales/Total Assets | |||||
| Return on Equity | % | 103 | 87.3 | 5.57 | -1.42 |
| A) Net Income/Stockholders Equity | |||||
| B) Return on Assets (Investment)/ | |||||
| (1-Debt/Assets) | |||||
| Receivables Turnover | Times | 9.78 | 9.08 | 6.45 | 8.35 |
| Sales/Receivables | |||||
| Avg. Collection Period | Days | 36.8 | 39.64 | 55.84 | 43.1 |
| Accounts Receivable/Avg. daily credit sales | |||||
| Inventory Turnover | Times | 105.13 | 110.22 | 44.82 | 14.58 |
| Sales/Inventory | |||||
| Fixed Asset Turnover | Times | 59 | 4.3 | 2.4 | 3.04 |
| Sales/Fixed Assets | |||||
| Total Asset Turnover | Times | 0.54 | 0.55 | 0.55 | 0.6 |
| Sales/Assets |
| Some recent financial statements for Smolira Golf Corp. follow. |
| SMOLIRA GOLF CORP. 2014 and 2015 Balance Sheets | ||||||||||||||||
| Assets | Liabilities and Ownersâ Equity | |||||||||||||||
| 2014 | 2015 | 2014 | 2015 | |||||||||||||
| Current assets | Current liabilities | |||||||||||||||
| Cash | $ | 23,066 | $ | 25,300 | Accounts payable | $ | 24,384 | $ | 28,300 | |||||||
| Accounts receivable | 13,648 | 16,400 | Notes payable | 14,000 | 12,000 | |||||||||||
| Inventory | 27,152 | 28,300 | Other | 12,771 | 19,700 | |||||||||||
| Total | $ | 63,866 | $ | 70,000 | Total | $ | 51,155 | $ | 60,000 | |||||||
| Long-term debt | $ | 81,000 | $ | 90,000 | ||||||||||||
| Ownersâ equity | ||||||||||||||||
| Common stock and paid-in surplus | $ | 55,000 | $ | 55,000 | ||||||||||||
| Accumulated retained earnings | 213,406 | 229,000 | ||||||||||||||
| Fixed assets | ||||||||||||||||
| Net plant and equipment | $ | 336,695 | $ | 364,000 | Total | $ | 268,406 | $ | 284,000 | |||||||
| Total assets | $ | 400,561 | $ | 434,000 | Total liabilities and ownersâ equity | $ | 400,561 | $ | 434,000 | |||||||
| SMOLIRA GOLF CORP. 2015 Income Statement | |||||||
| Sales | $ | 333,706 | |||||
| Cost of goods sold | 215,200 | ||||||
| Depreciation | 49,300 | ||||||
| Earnings before interest and taxes | $ | 69,206 | |||||
| Interest paid | 15,500 | ||||||
| Taxable income | $ | 53,706 | |||||
| Taxes (30%) | 16,112 | ||||||
| Net income | $ | 37,594 | |||||
| Dividends | $ | 22,000 | |||||
| Retained earnings | 15,594 | ||||||
| Find the following financial ratios for Smolira Golf Corp. (use year-end figures rather than average values where appropriate): (Enter your profitability ratio answers as a percent rounded to 2 decimal places, e.g., 32.16. Round the remaining answers to 2 decimal places, e.g., 32.16.) |
| Short-term solvency ratios: | 2014 | 2015 | |
| a. | Current ratio | times | times |
| b. | Quick ratio | times | times |
| c. | Cash ratio | times | times |
| Asset utilization ratios: | |||
| d. | Total asset turnover | times | |
| e. | Inventory turnover | times | |
| f. | Receivables turnover | times | |
| Long-term solvency ratios: | 2014 | 2015 | |
| g. | Total debt ratio | times | times |
| h. | Debtâequity ratio | times | times |
| i. | Equity multiplier | times | times |
| j. | Times interest earned | times | |
| k. | Cash coverage ratio | times | |
| Profitability ratios: | |||
| I. | Profit margin | % | |
| m. | Return on assets | % | |
| n. | Return on equity | % | |
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Ratio Analysis. The Williams Corporationâs forecasted 2010 financial statements follow, along with some industry average ratios.
| Forecasted Balance Sheet as of December 31, 2010 | ||||
| Cash | $ 72,000 | |||
| Accounts receivables | $ 439,000 | Accounts and notes payable | $ 432,000 | |
| Inventories | $ 894,000 | Accruals | $ 170,000 | |
| Total current assets | $1,405,000 | Total current liabilities | $ 602,000 | |
| Land and building | $ 238,000 | Long-term debt | $ 404,290 | |
| Machinery | $ 132,000 | Common stock | $ 575,000 | |
| Other fixed assets | $ 61,000 | Retained earnings | $ 254,710 | |
| Total assets | $1,836,000 | Total liabilities and equity | $1,836,000 | |
| Forecasted Income Statement for 2010 | ||||
| Sales | $4,290,000 | |||
| Cost of goods sold | $3,580,000 | Per-Share Data | ||
| Gross operating profit | $ 710,000 | EPS | $ 4.71 | |
| General admin & selling expenses | $ 236,320 | DPS | $ 0.95 | |
| Depreciation | $ 159,000 | P/E Ratio | 5.00 | |
| Misc. | $ 134,000 | Market price | $ 23.57 | |
| Earnings before Taxes | $ 180,680 | Number of shares outstanding | 23000 | |
| Taxes | $ 72,272 | |||
| Net Income | $ 108,408 | |||
| Industry Financial Ratios | Williamâs Financial Ratios | Ratio/Comment | ||
| Quick Ratio | 1x | Quick Ratio | ||
| Current Ratio | 2.7x | Current Ratio | ||
| Inventory Turnover | 7x | Inventory Turnover | ||
| Days Sales Outstanding | 40 days | Days Sales Outstanding | ||
| Fixed Asset Turnover | 13x | Fixed Asset Turnover | ||
| Total Asset Turnover | 2.6x | Total Asset Turnover | ||
| Return on Assets | 9.10% | Return on Assets | ||
| Return on Equity | 18.20% | Return on Equity | ||
| Debt Ratio | 55% | Debt Ratio | ||
| Profit Margin on Sales | 3.50% | Profit Margin on Sales | ||
| P/E Ratio | 6x | P/E Ratio |
Please show all work for the following questions.
a. Calculate the indicated ratios for Williamâs in the appropriate blanks.
b. Outline Williamâs strengths and weaknesses as compared to its industry. Be detailed in your ratio analysis.
c. Recommend at least three areas for correction. Be sure to support your recommendations.
d. Why is being trustworthy essential to success in the business world? Use at least two of the following scriptures to answer this question: Psalm 101:7, Proverbs 4:20-27, Proverbs 13:11, and Proverbs 28:12-13.
