Principles of Financial Accounting.
24th Edition
ISBN: 9781260158601
Author: Wild
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Videos
Question
Chapter 1, Problem 14E
To determine
Find out the way for assessing the performance of Company S if its competitors average an 11% return on assets.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Swiss Group reports net income of $40,000 for 2019. At the beginning of 2019, Swiss Group had $200,000 in assets. By the end of 2019, assets had grown to $300,000. What is Swiss Group’s 2019 return on assets? How would you assess its performance if competitors average an 11% return on assets?
The initial analysis should include the following:
The ratio equation
The calculation of the ratio using the equation and the pre-assigned Quick Study or Exercise from the textbook. (See below)
Use the result in a sentence; i.e. For every dollar invested in assets the company is earning 22.4 cents or 22.4% in net income.
Then explain whether this is a good result or a result that needs improving.
Use citations to cite any outside sources used.
The original post should include at least three (3) sentences but no more than seven (7) sentences.
All-Hands Property & Casualty Insurance
Company has the following financial ratios.
2019 2018
Loss Ratio 67.8 68.1
Expense Ratio 24.2 25.1
Net Investment Yield 3.5 4.0
a. Calculate the Combined Ratio {Loss Ratio +
Expense Ratio} for each year. Combined Ratio
2019
Combined Ratio 2018
b. Calculate the Overall Profitability Ratios
Overall Profitability Ratio 2019
Overall Profitability
Ratio 2018
why the Overall Profitability Ratio Changed
in 2019 Based on the Loss Ratio, Expense
Ratio, and Net Investment Yield Trends?
for the year ending december 31 2019, settles inc. eanred an ROI of 8.8%. Sales for the year were 16 million and average asset turnover was 2.1. Average stockholder equity was 2.7 million.
a. calculate settles margin and net inccome
b. calculate settles return on equity
Chapter 1 Solutions
Principles of Financial Accounting.
Ch. 1 - Prob. 1MCQCh. 1 - Prob. 2MCQCh. 1 - If the assets of a company increase by 100,000...Ch. 1 - Brunswick borrows 50,000 cash from Third National...Ch. 1 - Geek Squad performs services for a customer and...Ch. 1 - Prob. 1DQCh. 1 - Technology is increasingly used to process...Ch. 1 - Identify four kinds of external users and describe...Ch. 1 - What are at least three questions business owners...Ch. 1 - Identify three actual businesses that offer...
Ch. 1 - Describe the internal role of accounting for...Ch. 1 - Prob. 7DQCh. 1 - What type of accounting information might be...Ch. 1 - Why is accounting described as a service activity?Ch. 1 - What are some accounting-related professions?Ch. 1 - Prob. 11DQCh. 1 - Prob. 12DQCh. 1 - What does the concept of objectivity imply for...Ch. 1 - Prob. 14DQCh. 1 - Why is the revenue recognition principle needed?...Ch. 1 - Describe the three basic forms of business...Ch. 1 - Define (a) assets, (b) liabilities, (c) equity,...Ch. 1 - Prob. 18DQCh. 1 - Identify the two main categories of accounting...Ch. 1 - What do accountants mean by the term revenue?Ch. 1 - Prob. 21DQCh. 1 - Prob. 22DQCh. 1 - Prob. 23DQCh. 1 - Give two examples of expenses a business might...Ch. 1 - What is the purpose of the statement of retained...Ch. 1 - Prob. 26DQCh. 1 - Prob. 27DQCh. 1 - Define and explain return on assets.Ch. 1 - Define return and risk. Discuss the trade-off...Ch. 1 - Prob. 30DQCh. 1 - Prob. 31DQCh. 1 - Prob. 32DQCh. 1 - GOOGLE Access the SEC EDGAR database (SEC.gov) and...Ch. 1 - Understanding accounting Choose from the following...Ch. 1 - Identifying accounting users C2 Identify the...Ch. 1 - Prob. 3QSCh. 1 - Prob. 4QSCh. 1 - Prob. 5QSCh. 1 - Identifying accounting principles and assumptions...Ch. 1 - Applying the accounting equation A1 a. Total...Ch. 1 - Applying the accounting equation Use the...Ch. 1 - Use Google 's December 31, 2017, financial...Ch. 1 - Prob. 10QSCh. 1 - Prob. 11QSCh. 1 - Prob. 12QSCh. 1 - Prob. 13QSCh. 1 - Prob. 14QSCh. 1 - Prob. 15QSCh. 1 - Prob. 16QSCh. 1 - Prob. 17QSCh. 1 - Classifying activities reflected in the accounting...Ch. 1 - Prob. 2ECh. 1 - Prob. 3ECh. 1 - Prob. 4ECh. 1 - Prob. 5ECh. 1 - Prob. 6ECh. 1 - Prob. 7ECh. 1 - Using the accounting equation Determine the...Ch. 1 - Using the accounting equation Answer the following...Ch. 1 - Analysis using the accounting equation Zen began a...Ch. 1 - Identifying effects of transactions on the...Ch. 1 - Identifying effects of transactions on the...Ch. 1 - Identifying effects of transactions using the...Ch. 1 - Prob. 14ECh. 1 - Preparing an income statement On October 1, Ebony...Ch. 1 - Preparing a statement of retained earnings Use the...Ch. 1 - Prob. 17ECh. 1 - Preparing a statement of cash flows Use the...Ch. 1 - Prob. 19ECh. 1 - Prob. 20ECh. 1 - Match each transaction a through e to one of tire...Ch. 1 - Prob. 22ECh. 1 - Using the accounting equation A1 Answer the...Ch. 1 - Identifying effects of transactions on financial...Ch. 1 - Computing missing information using accounting...Ch. 1 - Preparing an income statement P2 As of December...Ch. 1 - Prob. 4APCh. 1 - Prob. 5APCh. 1 - Preparing a statement of cash flows P2 Following...Ch. 1 - Prob. 7APCh. 1 - Prob. 8APCh. 1 - Determining expenses, liabilities. equity, and...Ch. 1 - Prob. 11APCh. 1 - Prob. 12APCh. 1 - Describing business activities C5 A start-up...Ch. 1 - Describing business activities An organization...Ch. 1 - Prob. 1BPCh. 1 - Prob. 3BPCh. 1 - Prob. 4BPCh. 1 - Prob. 5BPCh. 1 - Prob. 6BPCh. 1 - Prob. 8BPCh. 1 - Determining expenses, liabilities, equity, and...Ch. 1 - Prob. 11BPCh. 1 - Identifying risk and return All business decisions...Ch. 1 - Prob. 13BPCh. 1 - Prob. 14BPCh. 1 - Prob. 1SPCh. 1 - COMPANY ANALYSIS Key financial figures for Apple's...Ch. 1 - Prob. 2AACh. 1 - Prob. 3AACh. 1 - ETHICS CHALLENGE Tana Thorne works in a public...Ch. 1 - COMMUNICATING IN PRAC TICE APPLE Refer to this...Ch. 1 - TAKING IT TO THE NET A2 Visit the EDGAR database...Ch. 1 - ENTREPRENEURIAL DECISION APPLE Refer to this...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Profitability Ratios Tinker Corporation operates in the highly competitive consulting industry. Tinkers balance sheet indicates the following balances as of December 31, 2019. Required: Calculate Tinkers return on equity if Tinkers 2019 net income is $90,000.arrow_forwardAsset Efficiency Ratios Rumsford Inc.s financial statements for 2019 indicate the following account balances: Required: 1. Using this information, calculate Rumsfords receivable turnover ratio. (Note: Round to two decimal places.) 2. Using this information, calculate Rumsfords asset turnover ratio and also convert the ratio into days.arrow_forwardCalculate the 2019 inventory turnover, days sales outstanding (DSO), fixed assets turnover, and total assets turnover. How does Computrons utilization of assets stack up against that of other firms in its industry?arrow_forward
- Problem 1: Viance Queen Company Required: Compute for the company’s profitability and operating efficiency ratios for 2019 Compute for the financial health ratios of the company for 2019 A.Profitability ratio Return on Assets: ROA (EBIT/Average Assets) ROE (NI/Capital) ROE (NI/Average Capitalarrow_forward4. Table 1 below presents some of the financial ratios of Company XYZ for 2019. Table 1. Financial Ratios of Company XYZ, 2019 Value 2.6 12 2.7 16% 2% 20% 60% Ratio Total Asset Turnover Ratio Fixed Asset Turnover Ratio Current Ratio Gross Profit Margin Net Profit Margin Long-term Debt Ratio Total Debt Ratio What is the company's Return on Equity (ROE) for 2019? A. 6.5% B. 13.0% C. 9.6% D. 3.12% Net Protit marigin XTT Xarrow_forward1. Compute for the company's profitability and operating efficiency's ratios for 2019 B.Operating Efficiency a. Asset Turnover b. Fixed Asset Turnover c. Inventory Turnover d. Days in Inventory e. AR Turnover f. Days in ARarrow_forward
- Problem 1: Viance Queen Company Required: Compute for the company’s profitability and operating efficiency ratios for 2019 Compute for the financial health ratios of the company for 2019 A.Profitability ratio a. Return on Assets: ROA (NI/Total Assets) ROA (NI/Average Assets) ROA (EBIT/Total Assets) ROA (EBIT/Average Assets) ROE (NI/Capital) ROE (NI/Average Capitalarrow_forwardWhat are the firm's days' sales outstanding for 2018 and 2019? Income Statements ($ in millions) Balance Sheets ($ in millions) 2018 2019 Assets 2018 2019 $1,265 | Cash $780 Short-Term investments $92 | Accounts rec. Sales Revenue $1,180 $35 $20 $660 $20 $5 Less: Cost of goods sold Less: Operating Expenses Less: Depreciation Earnings before interest and taxes Less: Interest paid $75 190 235 $50 Inventory $343 Total Current Assets $40 250 300 $405 $495 $560 $170 $150 | Net fixed assets 990 1,105 Taxable Income $235 $193 Less: Taxes (40%) $94 $77 Total assets $1,485 1,665 Net income $141 $116 Liabilities and Owner's Equity Dividends (45%) Additions to Retained Earnings $63 $52 2018 2019 $78 $64 Accounts payable $125 $100 Accruals $10 $10 Notes payable 35 40 Total Current Liabilities $170 $150 Long-term debt 598 790 Total Liabilities $768 $940 Common stock 554 498 Retained earnings Total Equity Total liab.& equity 163 $227 717 $725 $1,485 $1,665arrow_forwardWhat are the firm’s net profit margins for 2018 and 2019? Income Statements ($ in millions) Balance Sheets ($ in millions) 2018 2019 Assets 2018 2019 Sales Revenue $2,580 $2,865 Cash $70 $50 Less: Cost of goods sold $1,060 $1,500 Short-Term investments $35 $9 Less: Operating Expenses $105 $162 Accounts rec. 400 460 Less: Depreciation $85 $80 Inventory 490 556 Earnings before interest and taxes $1,330 $1,123 Total Current Assets $995 $1,075 Less: Interest paid $350 $380 Net fixed assets 1890 1,910 Taxable Income $980 $743 Less: Taxes (40%) $392 $297 Total assets $2,885 2,985 Net income $588 $446 Liabilities and Owner's Equity Dividends (45%) $265 $201 2018 2019 Additions to Retained Earnings $323 $245 Accounts payable $240 $210 Accruals $20 $20 Notes payable 65 74 Total Current…arrow_forward
- Forecast an Income Statement Seagate Technology reports the following income statement for fiscal 2019. SEGATE TECHNOLOGY PLC Consolidated Statement of Income For Year Ended June 28, 2019, $ millions Revenue $10,835 Cost of revenue 7,458 Product development 1,436 Marketing and administrative 898 Amortization of intangibles 23 Restructuring and other, net (22) Total operating expenses 9,793 Income from operations 1,042 Interest income 529 Interest expense (224) Other, net 25 Other income (expense), net 330 Income before income taxes 1,372 (Benefit) provision for income taxes (640) Net income $2,012 Forecast Seagate’s 2020 income statement assuming the following income statement relations ($ millions). Note: Complete the entire question using the following Excel template: Excel Template. Then enter the answers into the provided spaces below with two decimal places. Assumptions Revenue growth 5% growth Cost of revenue 71.8% of…arrow_forwardWhat are the firm's current ratios for 2018 and 2019? Income Statements ($ in millions) Balance Sheets ($ in millions) 2018 2019 Assets 2018 2019 $1,265 | Cash $780 Short-Term investments Sales Revenue $1,180 $35 $20 $660 $20 $5 Less: Cost of goods sold Less: Operating Expenses Less: Depreciation Earnings before interest and taxes Less: Interest paid $75 $92 | Accounts rec. 190 235 $40 $50 Inventory 250 300 $405 $343 Total Current Assets $495 $560 $170 $150 | Net fixed assets 990 1,105 Taxable Income $235 $193 Less: Taxes (40%) $77 Total assets $116 Liabilities and Owner's Equity $94 $1,485 1,665 Net income $141 Dividends (45%) Additions to Retained Earnings $63 $52 2018 2019 $64 Accounts payable Аccruals $78 $125 $100 $10 $10 Notes payable 35 40 Total Current Liabilities $170 $150 Long-term debt 598 790 Total Liabilities $768 $940 Common stock 554 498 Retained earnings Total Equity Total liab.& equity 163 $227 717 $725 $1,485 $1,665arrow_forwardOperating data for Joshua Corporation are presented below. 2020 2019 Sales revenue $ 755,000 $ 604,000 Cost of goods sold 464,325 386,560 Selling expenses 118,535 75,500 Administrative expenses 58,135 54,360 Income tax expense 37,750 24,764 Net income 76,255 62,816 Prepare a schedule showing a vertical analysis for 2020 and 2019. (Round answers to 1 decimal place, e.g. 48.5%.)arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage Learning
Intermediate Financial Management (MindTap Course...FinanceISBN:9781337395083Author:Eugene F. Brigham, Phillip R. DavesPublisher:Cengage Learning
Fundamentals Of Financial Management, Concise Edi...FinanceISBN:9781337902571Author:Eugene F. Brigham, Joel F. HoustonPublisher:Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Cengage Learning
Intermediate Financial Management (MindTap Course...
Finance
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Cengage Learning
Fundamentals Of Financial Management, Concise Edi...
Finance
ISBN:9781337902571
Author:Eugene F. Brigham, Joel F. Houston
Publisher:Cengage Learning
Financial Projections for Startups Basic Walkthrough; Author: Mike Lingle;https://www.youtube.com/watch?v=7avegQF4dxI;License: Standard youtube license