The comparative financial statements prepared at December 31 for Golden Corporat
ID: 2526423 • Letter: T
Question
The comparative financial statements prepared at December 31 for Golden Corporation showed the following summarized data:
Compute the gross profit percentage for the current and previous years. (Round your answers to 1 decimal place.)
Compute the net profit margin for the current and previous years. (Round your answers to 1 decimal place.)
Compute the earnings per share for the current and previous years.
TIP: To calculate EPS, use the balance in Common Stock to determine the number of shares outstanding. Common Stock equals the par value per share times the number of shares. (Round your answers to 2 decimal places.)
Stockholders’ equity totaled $32,400 at the beginning of the previous year. Compute the return on equity (ROE) ratios for the current and previous years. (Round your answers to 1 decimal place.)
Net property and equipment totaled $37,000 at the beginning of the previous year. Compute the fixed asset turnover ratios for the current and previous years. (Round your answers to 2 decimal places.)
Compute the debt-to-assets ratios for the current and previous years. (Round your answers to 2 decimal places.)
Compute the times interest earned ratios for the current and previous years. (Round your answers to 1 decimal place.)
After Golden released its current year’s financial statements, the company’s stock was trading at $34. After the release of its previous year’s financial statements, the company’s stock price was $25 per share. Compute the P/E ratios for both years. (Round your intermediate calculations and final answers to 2 decimal places.)
The comparative financial statements prepared at December 31 for Golden Corporation showed the following summarized data:
Explanation / Answer
1 a
1 b. Current year results are Better as Gross profit % has increased
2 a.
2b.Current year results are Better as Net profit % has increased
3 a.
3b Current year results are Better as EPS has increased.
4a.
4b.Current year results are Better as ROE has increased.
5a.
5b Current year results are Worse as FA Turnover Ratio has decreased.
6a
Total Liabilities=Current Liabilities+Note Payable
6.b Debt is providing financing for smaller proportion for companys assset growth
7a.
7b Current Year results are better as Interest Earned Ratio has increased
8a
8b.Investors have become less optimistic about the companys future success as PE Ratio has decreased
Gross Profit %` Gross Profit/Sales Current Previous Gross Profit 82,000.00 73,000.00 Sales 200,000.00 181,000.00 Gross Profit %` 41.0% 40.3%