Income statement for the period ending Dec 31, 2013 net sales:Heckle-$12,560,000
ID: 2481364 • Letter: I
Question
Income statement for the period ending Dec 31, 2013 net sales:Heckle-$12,560,000, Jeckle- $25,210,000 Costs and expenses: cost of goods sold: Heckle- $6,142,000, Jeckle-$14,834,000 selling expenses:Heckle- $4,822,600, Jeckle-7108200 administrative expenses: Heckle- $986000, Jeckle-2,434,000 total costs and expenses:Heckle- 11950600, Jeckle- 24376200 income from operations: Heckle- 609400, Jeckle- 833800 interest expense: Heckle- 194000, Jeckle- 228000 income before income taxes: Heckle- 415400, Jeckle-605800 income taxes expense: Heckle- 200000, Jeckle- 300000 net income: Heckle- 215400, Jeckle- 305800 ------------------------------------------------------ Balance sheet Dec 31, 2013 Assets Cash: Heckle-80000, Jeckle-192400 Marketable securities at cost: Heckle- 203400, Jeckle-84600 accounts receivable,net: Heckle- 552800, Jeckle-985400 inventory: Heckle- 629800, Jeckle-1253400 prepaid expenses: Heckle- 54400, Jeckle-114000 property, plant, and equipment,net: Heckle- 2,913,600, Jeckle- 6,552,000 intangibles and other assets: Heckle- 553200, Jeckle-144800 total assets: Heckle- 4987200, Jeckle- 9326600 Liabilities and stockholder's equity Accounts Payable: Heckle- 344000, Jeckle- 572600 notes payable: Heckle- 150000, Jeckle- 400000 income taxes payable: Heckle-50200, Jeckle- 73400 bonds payable: Heckle- 2,000,000, Jeckle- 2,000,000 Common stock, $20 par: Heckle- 1,000,000, Jeckle- 600,000 Paid in Capital: Heckle- 609800, Jeckle- 3568600 retained earnings: Heckle- 833200, Jeckle- 2,112,000 total liabilities and stockholders equity: Heckle- 4987200, Jeckle- 9,326,600 During the year, Heckle paid a total of $50,000 in dividends. The market price per share of its stock is currently $60. In comparison, Jeckle paid a total of $114,000 in dividends, and the current market price of its stock is $76 per share. Heckle had net cash flows from operations of $271,500 and net capital expenditures of $625,000. Jeckle had net cash flows from operations of $492,500 and net capital expenditures of $1,050,000. Information for prior years is not readily available. Assume that all notes payable are current liabilities and all bonds payable are long term liabilities and that there is no change in inventory. Prepare an Operating Asset Management Analysis by calculating for each company the : a) current ratio b) quick ratio c) receivables turnover d) day’s sales uncollected e) inventory turnover f) days’ inventory on hand g) payables turnover h) days’ payable i) financing period Prepare a Profitability And Total Asset Management Analysis by calculating for each company the: a)profit margin b) asset turnover c) return on assets Prepare a Financial Risk Analysis by calculating for each company the: a)debt to equity ratio b) return on equity c) investing coverage ratio Prepare a Liquidity Analysis by calculating for each company the cash flow yield a)Cash flows to sales b) Cash flows to assets c) Free cash flows Prepare An Analysis Of Market Strength by calculating for each company the: a)price/earnings ratio b)dividend yield How do I calculate these
Explanation / Answer
Hey Dear Student !!
A)
Current Ratio:
Current Assets/Current Liabilities
Heckle:
Current Assets:
Cash $80000
Marketable Securities. $203400
Accounts Receivable $552800
Inventory $629800
Prepaid Expenses. $54400
Total. $1520400
Current Liabilities:
Account Payables $344000
Note Payables. $150000
Income Tax Payables $50200
Total. $544200
Current Ratio:
1520400/544200= 2.79 Times
Jeckle:
Current Assets:
Cash $192400
Marketable Securities. $84600
Accounts Receivable $985400
Inventory $1253400
Prepaid Expenses. $114000
Total. $2629800
Current Liabilities:
Account Payables $572600
Note Payables. $400000
Income Tax Payables $73400
Total. $1046000
Current Ratio:
2629800/104600= 2.51 Times
B)
Quick Ratio:
Quick Assets/Current Liabilities
Hecle:
Quick Assets:
Current assets- Inventory
1520400-629800= $890600
Quick Ratio:
890600/544200= 1.64 Times
Jecle:
Quick Assets:
Current assets- Inventory
2629800-1253400= $1376400
Quick Ratio:
1376400/1046000= 1.32 Times
C)
Account Receivable Turnover Ratio:
Sales/Account Receivables
Hecle:
12560000/552800= 22.72 Times
Jecke:
25210000/985400= 25.58 Times
D)
Days Sales Uncollected:
Account Receivables/sales X 365
Hecle:
552800/12560000 X 365= 16 Days
Jecle:
985400/25210000 X 365=
14.27 Days
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Pleasure Teaching You !!