Survey of Accounting (Accounting I)
8th Edition
ISBN: 9781305961883
Author: Carl Warren
Publisher: Cengage Learning
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Chapter 9, Problem 9.20E
To determine
(a)
Introduction:
Accounting ratios are used to evaluate the financial performance of the business organisation.
Time interest earned TIE :
It is a matric used to measure a company's ability to meet debit obligation it can be calculated using following formula:
The time interest earned.
Expert Solution
Answer to Problem 9.20E
Solvency analysis using time interest earned suggests that the company is in good solvency position as time interest earned shows it has adequate earning to pay debt obligationswhich is 8.75 times and shareholders ratios suggest enough earnings for shareholders.
Explanation of Solution
| Ratios | ||
| a | Time interest earned | |
To determine
(b)
Concept Introduction:
Time preferred dividends earned: it measures company's ability to pay preferred dividends in it also known as dividends coverage it can be calculated using following formula:
To calculate:
Time preferred dividends earned
Expert Solution
Answer to Problem 9.20E
Solvency analysis using time preferential dividends earned paid suggests that the company does not have earning to pay preferential dividends obligations which is 0.05 times.
Explanation of Solution
| Ratios | ||
| b | Time preferred dividends earned | |
To determine
(c)
Concept Introduction:
Earnings per share: show how many dollars of net income is earned by common stockholder, it can be calculated using following formula.
To calculate:
The profit earned on each issued share using earning per share.
Expert Solution
Answer to Problem 9.20E
Profitability analysis using earning per share suggests that the profitability position of the company is satisfactory.
Explanation of Solution
| Ratios | ||
| c | Earnings per share | |
To determine
(d)
Concept Introduction:
Price earnings ratio P/E ratio: it indicates the amount an investor can expect to invest in a company in order to receive one dollar of company's earnings.
Expected price of share based on earning using price earnings ratio.
Expert Solution
Answer to Problem 9.20E
Profitability analysis using price earning suggests that the profitability position and positive future performance.
Explanation of Solution
| Ratios | ||
| d | Price earnings ratio | |
To determine
(e)
Concept Introduction:Dividends per share:
It is the sum of ordinary dividends declared by the company.
Dividends per share of common stock.
Expert Solution
Answer to Problem 9.20E
Profitability analysis using dividends per share suggests that the profitability position of the company is satisfactory and can declare dividends at the rate of 0.03.
Explanation of Solution
| Ratios | ||
| e | Dividends per share | |
To determine
(f)
Concept Introduction:
Dividends yield: is an estimation of dividend only return of stock investment.
To calculate:
Annual dividends received per share.
Expert Solution
Answer to Problem 9.20E
Profitability analysis using dividends yield suggests that the profitability position of the company is satisfactory, and SHI Inc. annual value of dividends received were 0.04.
Explanation of Solution
| Ratios | ||
| f | Dividends yield | |
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Suppose that you are given the following data for Niles Company :
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Five Measures of Solvency or Profitability
The balance sheet for Quigg Inc. at the end of the current fiscal year indicated the following:
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Common stock, $12 par
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$900,000
104,000
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%
Suppose that you are given the following data for Niles Company :
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Chapter 9 Solutions
Survey of Accounting (Accounting I)
Ch. 9 - What type of analysis is indicated by the...Ch. 9 - Which of the following measures indicates the...Ch. 9 - Prob. 3SEQCh. 9 - Prob. 4SEQCh. 9 - Prob. 5SEQCh. 9 - That is the difference between horizontal and...Ch. 9 - Prob. 2CDQCh. 9 - Prob. 3CDQCh. 9 - Prob. 4CDQCh. 9 - How would the current and quick ratios of a...
Ch. 9 - For Belzcr Corporation, the working capital at the...Ch. 9 - Prob. 7CDQCh. 9 - Prob. 8CDQCh. 9 - a. Why is it advantageous to have a high inventory...Ch. 9 - Prob. 10CDQCh. 9 - Prob. 11CDQCh. 9 - Prob. 12CDQCh. 9 - Prob. 13CDQCh. 9 - Prob. 14CDQCh. 9 - Prob. 15CDQCh. 9 - Favorable business conditions may bring about...Ch. 9 - Prob. 17CDQCh. 9 - Prob. 9.1ECh. 9 - Vertical analysis of income statement The...Ch. 9 - Common-sized income statement Revenue and expense...Ch. 9 - Prob. 9.4ECh. 9 - Prob. 9.5ECh. 9 - Prob. 9.6ECh. 9 - Prob. 9.7ECh. 9 - Current position analysis The bond indenture for...Ch. 9 - Accounts receivable analysis The following data...Ch. 9 - Prob. 9.10ECh. 9 - Inventory analysis The following data were...Ch. 9 - Inventory analysis Costco Wholesale Corporation...Ch. 9 - Ratio of liabilities to stockholders' equity and...Ch. 9 - Prob. 9.14ECh. 9 - Debt ratio, ratio of liabilities to stockholders'...Ch. 9 - Prob. 9.16ECh. 9 - Profitability metrics The following selected data...Ch. 9 - Profitability metrics Macy's, Inc. (M). sells...Ch. 9 - Seven metrics The following data were taken from...Ch. 9 - Prob. 9.20ECh. 9 - Prob. 9.21ECh. 9 - Prob. 9.22ECh. 9 - Unusual income statement items Assume that the...Ch. 9 - Horizontal analysis for income statement For 20Y3....Ch. 9 - Horizontal analysis for income statement For 20Y3....Ch. 9 - Prob. 9.2.1PCh. 9 - Prob. 9.2.2PCh. 9 - Effect of transactions on current position...Ch. 9 - Effect of transactions on current position...Ch. 9 - Twenty metrics of liquidity, solvency, and...Ch. 9 - Twenty metrics of liquidity, solvency, and...Ch. 9 - Twenty metrics of liquidity, solvency, and...Ch. 9 - Twenty metrics of liquidity, solvency, and...Ch. 9 - Twenty metrics of liquidity, solvency, and...Ch. 9 - Twenty metrics of liquidity, solvency, and...Ch. 9 - Prob. 9.4.7PCh. 9 - Twenty metrics of liquidity, solvency, and...Ch. 9 - Twenty metrics of liquidity, solvency, and...Ch. 9 - Twenty metrics of liquidity, solvency, and...Ch. 9 - Twenty metrics of liquidity, solvency, and...Ch. 9 - Twenty metrics of liquidity, solvency, and...Ch. 9 - Twenty metrics of liquidity, solvency, and...Ch. 9 - Twenty metrics of liquidity, solvency, and...Ch. 9 - Twenty metrics of liquidity, solvency, and...Ch. 9 - Twenty metrics of liquidity, solvency, and...Ch. 9 - Twenty metrics of liquidity, solvency, and...Ch. 9 - Twenty metrics of liquidity, solvency, and...Ch. 9 - Twenty metrics of liquidity, solvency, and...Ch. 9 - Prob. 9.4.20PCh. 9 - Trend analysis Critelli Company has provided the...Ch. 9 - Trend analysis Critelli Company has provided the...Ch. 9 - Prob. 9.1CCh. 9 - Prob. 9.2CCh. 9 - Prob. 9.3CCh. 9 - Prob. 9.4.1CCh. 9 - Prob. 9.4.2CCh. 9 - Prob. 9.4.3CCh. 9 - Comprehensive profitability and solvency analysis...Ch. 9 - Comprehensive profitability and solvency analysis...
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