11.11.2020

Round 11.348 to 2 decimal places

. 8

Step-by-step answer

11.01.2023, solved by verified expert

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Business
Step-by-step answer
P Answered by PhD

Lendell Company

a. Current ratio = Current assets/Current liabilities

= $148,000/50,000

= 2.96

= 3

b. Accounts Receivable Turnover = Net Sales/Average Accounts Receivable

= $396,000/66,000

= 6 times

c. Average collection period  = Average Accounts Receivable/Net Sales * 365 days

= $66,000/$396,000 * 365

= 60.8 days

d. Inventory turnover  = Cost of Goods Sold/Average Inventory

= $196,000/56,000

= 3.5 times

e. Days in inventory = 365/3.5

104.3 days

Explanation:

a) Data and Calculations:

Lendell Company

Balance Sheets

December 31

                                                    2020           2019            Average

Cash                                       $ 16,000     $ 29,000         $ 22,500

Accounts receivable (net)         71,000         61,000            66,000

Inventory                                   61,000         51,000            56,000

Current assets                     $148,000      $141,000       $144,500

Plant assets (net)                  200,000        176,000          188,000

                                            $348,000     $317,000       $332,500

Accounts payable                 $50,000      $59,400         $54,700

Mortgage payable (15%)        106,000      106,000          106,000

Common stock, $10 par        143,000       115,000          129,000

Retained earnings                  49,000       36,600            42,800

                                           $348,000    $317,000       $332,500

Additional information for 2020:

1. Net income was $25,200.

2. Sales on account were $415,300.

Sales returns and allowances amounted to $19,300.

Net Sales $396,000

3. Cost of goods sold was $196,000.

4. Net cash provided by operating activities was $44,400.

5. Capital expenditures were $26,200

Cash dividends were $8,900

Business
Step-by-step answer
P Answered by PhD

Lendell Company

a. Current ratio = Current assets/Current liabilities

= $148,000/50,000

= 2.96

= 3

b. Accounts Receivable Turnover = Net Sales/Average Accounts Receivable

= $396,000/66,000

= 6 times

c. Average collection period  = Average Accounts Receivable/Net Sales * 365 days

= $66,000/$396,000 * 365

= 60.8 days

d. Inventory turnover  = Cost of Goods Sold/Average Inventory

= $196,000/56,000

= 3.5 times

e. Days in inventory = 365/3.5

104.3 days

Explanation:

a) Data and Calculations:

Lendell Company

Balance Sheets

December 31

                                                    2020           2019            Average

Cash                                       $ 16,000     $ 29,000         $ 22,500

Accounts receivable (net)         71,000         61,000            66,000

Inventory                                   61,000         51,000            56,000

Current assets                     $148,000      $141,000       $144,500

Plant assets (net)                  200,000        176,000          188,000

                                            $348,000     $317,000       $332,500

Accounts payable                 $50,000      $59,400         $54,700

Mortgage payable (15%)        106,000      106,000          106,000

Common stock, $10 par        143,000       115,000          129,000

Retained earnings                  49,000       36,600            42,800

                                           $348,000    $317,000       $332,500

Additional information for 2020:

1. Net income was $25,200.

2. Sales on account were $415,300.

Sales returns and allowances amounted to $19,300.

Net Sales $396,000

3. Cost of goods sold was $196,000.

4. Net cash provided by operating activities was $44,400.

5. Capital expenditures were $26,200

Cash dividends were $8,900

Business
Step-by-step answer
P Answered by PhD

Answer and Explanation:

The computation of Construction of the extended Du Pont equation for both Lozano and the industry is shown below:-

Current asset ÷ current liability = 2

Days sales outstanding =35 days

Sales ÷ Inventory = 6.67

Sales ÷ Fixed assets = 5.55

Sales ÷ Total assets = 1.754

Net income ÷ Sales = 1.5%

Net income ÷ Total assets = 2.64%

Net income ÷ common equity = 6.45%

Total liabilities ÷ Total assets =59%

b. the computation of firm and industry ROE is shown below:-

Du Pont

Lozano

ROI = [(net profit ÷ sales) × (sales ÷ Total assets)]

= [(113,022 ÷ 7,500,000) × (7,500,000 ÷ 4,275,000)]

= 0.0264

or

= 2.64%

For Industry

ROI = 1.2% × 3

= 0.036

or

= 3.6%

c. Lozano's strengths

1. ROI determined the profit at the time when a firm earned on investing a capital unit

2. Also, the net income or sales figured out the efficiency level so that it could maintain the business affairs

Lozano's Weakness

1.  If we compare the fixed asset turnover with the average of an industry than the investment made in fixed assets would not be a good judgment

Business
Step-by-step answer
P Answered by PhD

Answer and Explanation:

The computation of Construction of the extended Du Pont equation for both Lozano and the industry is shown below:-

Current asset ÷ current liability = 2

Days sales outstanding =35 days

Sales ÷ Inventory = 6.67

Sales ÷ Fixed assets = 5.55

Sales ÷ Total assets = 1.754

Net income ÷ Sales = 1.5%

Net income ÷ Total assets = 2.64%

Net income ÷ common equity = 6.45%

Total liabilities ÷ Total assets =59%

b. the computation of firm and industry ROE is shown below:-

Du Pont

Lozano

ROI = [(net profit ÷ sales) × (sales ÷ Total assets)]

= [(113,022 ÷ 7,500,000) × (7,500,000 ÷ 4,275,000)]

= 0.0264

or

= 2.64%

For Industry

ROI = 1.2% × 3

= 0.036

or

= 3.6%

c. Lozano's strengths

1. ROI determined the profit at the time when a firm earned on investing a capital unit

2. Also, the net income or sales figured out the efficiency level so that it could maintain the business affairs

Lozano's Weakness

1.  If we compare the fixed asset turnover with the average of an industry than the investment made in fixed assets would not be a good judgment

Business
Step-by-step answer
P Answered by PhD

Joel de Paris, Inc.

1a. Company's margin = Net operating income / Sales x 100 = $652,860 / $5,022,000 x 100 = 13% based on net operating income

Net Margin = net income / sales x 100 = $328,860 / $5,022,000 x 100 = 6.5%

1b. Turnover = $5,022,000

1c. Return on Investment (ROI) = Net Income / Average cost of investment (average assets) = $328,860/$2,511,000 x 100 = 13%

2. Residual income = Net Income minus Minimum Expected Returns

Minimum Expected Returns = 17% of Average Cost of Investment = 17% x $2,511,000 = $426,870.

$328,860 - $426,870 = ($98,010)

Explanation:

a) Margin: Margin is the profit or income made in a financial period.  It is calculated by deducting costs from the sales revenue.  There are two important levels for margin: the gross margin and the net margin.  The gross margin represents the profit after deducting direct costs associated with revenue.  The net margin is the profit after deducting all business running expenses.  It is also called net income.

b) Turnover is the total sales in a financial period, otherwise called the 'gross revenue' or 'gross income.'   It is different from profit or margin, and it measures the overall performance of a business.

c) Return on Investment is a financial ratio which measures the efficiency and performance of an investment.  It is calculated as net income divided by the average cost of investment multiplied by 100.

d) Average Assets = ($2,474,000 + $2,548,000) / 2 = $2,511,000

e) The Residual Income is Economic Value Added.  It is obtained by deducting the cost of capital from the net operating profit after taxes.

Business
Step-by-step answer
P Answered by PhD

Joel de Paris, Inc.

1a. Company's margin = Net operating income / Sales x 100 = $652,860 / $5,022,000 x 100 = 13% based on net operating income

Net Margin = net income / sales x 100 = $328,860 / $5,022,000 x 100 = 6.5%

1b. Turnover = $5,022,000

1c. Return on Investment (ROI) = Net Income / Average cost of investment (average assets) = $328,860/$2,511,000 x 100 = 13%

2. Residual income = Net Income minus Minimum Expected Returns

Minimum Expected Returns = 17% of Average Cost of Investment = 17% x $2,511,000 = $426,870.

$328,860 - $426,870 = ($98,010)

Explanation:

a) Margin: Margin is the profit or income made in a financial period.  It is calculated by deducting costs from the sales revenue.  There are two important levels for margin: the gross margin and the net margin.  The gross margin represents the profit after deducting direct costs associated with revenue.  The net margin is the profit after deducting all business running expenses.  It is also called net income.

b) Turnover is the total sales in a financial period, otherwise called the 'gross revenue' or 'gross income.'   It is different from profit or margin, and it measures the overall performance of a business.

c) Return on Investment is a financial ratio which measures the efficiency and performance of an investment.  It is calculated as net income divided by the average cost of investment multiplied by 100.

d) Average Assets = ($2,474,000 + $2,548,000) / 2 = $2,511,000

e) The Residual Income is Economic Value Added.  It is obtained by deducting the cost of capital from the net operating profit after taxes.

Mathematics
Step-by-step answer
P Answered by PhD
0.0000111.1E-5

Step-by-step explanation:

In Istanbul, the number of resorts per person is ...

  160/(15.154·10^6) = 0.000011 . . . . rounded to 6 places

  = 1.1E-5 . . . . in scientific notation

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