财务报告与分析三友会计名著译丛第08章习题答案

1、财务报告与分析：三友会计名著译丛 第 08 章习题答案PROBLEMSPROBLEM 8-1Chapter 8ProfitabilityNet Profit Margin =Net Income Before Minority Share ofEarnings and Nonrecurri ng ItemsNet Sales20042003$52,500$40,000$1,050,000 $1,000,0005.00%4.00%Return on Assets =Net IncomeEarningsBefore Minority Share of and Nonrecurri ng Items

2、Average Total AssetsTotal Asset Turnover =2003$40,000$200,00020.00%Assets2003$1,000,000$200,0005.00 timesper year2004$52,500$230,00022.83%Net SalesAverage Total2004$1,050,000$230,0004.57 timesper year= Return on Common Equity =Net Income Before NoncurringItems Minus Preferred DividendsAverage Common

3、 Equity20042003$52,500$170,000$40,000$160,00030.88%25.00%Ahl Enterprise has had a substantial rise in profit to sales. This is somewhat tempered by a reduction in asset turnover. Given a slight rise in common equity, there is a substantial rise in return on common equity.PROBLEM 8-2 a.20042003b.Sale

4、sCost of goods sold Gross profit Selling expense General expense Operating income Income tax Net income100.0%60.739.314.610.0%100.0%60.839.220.08.3%Starr Canning has had a sharp decrease in selling with only a modest rise in general expenses giving an overall rise in the net prof

5、it margin.expense coupledPROBLEM 8-3Earnings Before interest and taxInterest (750,000 x 6%)Earnings before taxTaxNet incomePreferred dividendsIncome available to common$245,00045,000$200,00080,000$120,00015,000$105,000a.Return on AssetsNet Income Before Minority Share of Earnings and Nonrecurri ng I

6、tems$120,0004.00%Average Total Assets$3,000,000b.Return on Total EquityNet Income Before Nonrecurri ngItems - DividendsonRedeemable PreferredStockAverage Total Equity$120,000$3,000,0004.00%c.Return onCommon EquityNet Income Before Nonrecurri ng Items Average Common Equity Average Common Equity$200,0

7、00 - $80,000$15,000d.Times InterestEarned$1,500,0007.00%Recurring Earnings, Excluding InterestExpense, Tax Expense Equity Earnings,and Minority EarningsInterest Expense, IncludingCapitalize d Interest$245,000$45,000= 5.44 times per yearPROBLEM 8-4SalesSales returnsCost of goods sold Selling expense

8、General expense Other income Other expense Income tax Net incomeVent MoldedPlastics101.0%7.072.19.4 7.0 .41.5 4.8 5.6%Vent MoldedPlastics100.3%.3.41.35.5 8.5%taxes areSales returns are higher than the industry. Cost of sales is much higher, offset some by lower operating expenses. Other e

9、xpense (perhaps interest) is somewhat higher. Lower perhaps caused by lower income. Overall profit is less, primarily due to cost of sales.PROBLEM 8-5a.$1,589,150$1,294,966122.72%2004 sales were 122.72% of those in 2003.b.$138,204$137,110100.80%2004 net earnings were 100.80% of those in 2003.c.1.Net

10、 Profit Margin =Net Profit Before Minority Share ofEarnings and Nonrecurri ng ItemsNet Sales200320042.3.4.$149,260$1,589,1509.39%$149,760$1,294,96611.56%Return on Assets =2004$149,260 10.38%$1,437,63 6Total Asset Turnover =2004$1,589,150$1,437,636Net Income Before Minority Share ofEarnings and Nonre

11、curri ng ItemsAverage Total Assets2003$149,760$1,182,11012.67%Net SalesAverage Total Assets2003$1,294,966$1,182,110DuPont Analysis: Return on = Net Profit x Total Asset Assets Margin Turnover2004 10.42* = 9.39% x 1.112003 12.72* = 11.56% x 1.10*Rounded causes the difference from the 10.38% and 12.67

12、% computed in part 2.5.20032004Operating incomeNet salesLess: Cost of product sold$1,589,150$1,294,966651,390 466,250Research and development expensesGeneral and selling Operating income135,314526,680$ 275,766113,100446,110$ 269,506Operating Income Margin =Operating IncomeNet Sales20042003$275,766$2

13、69,506$1,589,150$1,294,9666. Return on Operating Assets =Operating IncomeAverage Operating Assets2004$1,589,150$1,411,686= 19.53%2003$269,506 $1,159,666= 23.24%7. Operating Asset Turnover =AverageNet SalesOperating Assets2004$1,589,150$1,411,686= 1.13 timesper year2003$1,294,966$1,159,666= 1.12 time

14、s per year8. DuPont Analysis: Return on = Net Profit x Total Asset Assets Margin Turnover200419.61%* = 17.35% x 1.13200323.31%* = 20.81% x 1.12*Rounding causes the difference computed in part 6.from the19.53%and24%10. Return on Common Equity =9.20042003Net earnings before minorityshare$ 149,260$ 149

15、,760Interest expense18,76811,522Earnings before tax263,762271,500Provision for income tax114,502121,740Tax rate43.4%44.8%1 tax rate56.6%55.2%(interest expense x(1 tax rate)10,6236,360Net earnings before minorityshare + (interest expense)x (1 tax rate)Long-term debt + equity159,883156,120Return on in

16、vestment1,019,420933,23215.7%16.7%Net SalesAverage Operating Assets20032004$138,204$810,292$137,110$720,530= 17.06%= 19.03%d.Profits in relation to sales, assets, and equity have all declined. Turnover has remained stable. Overall, although absolute profits have increased in 2004, compared with 2003

17、, the profitability ratios show a decline.PROBLEM 8-61.Net Profit Margin =Net Income Before Minority Share of Earnings and Nonrecurri ng ItemsNetSales200420032002$97,051$51,419$45,101$1,600,000$1,300,000$1,200,000= 6.07%= 3.96%= 3.76%Net Income BeforeMinority Share of2.Return on Assets =Earnings and

18、 Nonrecurri ng ItemAverage Total Assets200420032002$97,051$51,419$45,101$1,440,600$1,220,000$1,180,000= 6.04%= 4.21%= 3.82%3.Total Asset Turnover =Net SalesAverage TotalAssets200420032002$1,600,000$1,300,000$1,200,000$1,440,600$1,220,000$1,180,000= 1.11 times= 1.07 times= 1.02 timesper yearper yearp

19、er year4.DuPont AnalysisReturn onTotal AssetAssets =Net Profit Marginx Turnover2004: 6.74% =6.07%x1.11 times2003: 4.24% =3.96%Rounding difference from the 4.21% and 3.82% computed in 2.x 1.07 times2002: 3.84% =3.76%*x1.02 timesa.5. Operating Income Margin =Operating Income Net Sales(2) Net salesLess

20、:Material and manufacturing costs of products sold Research and development General and selling(1) Operating income(1) Dividend by (20)20042003$1,600,000$1,300,000740,00090,000600,0001,430,000170,00010.63%624,00078,000500,5001,202,50097,5007.50%2002$1,200,000576,00071,400465,0001,112,40087,6007.30%O

21、perating Income6. Return on Operating Assets =Average Operating Assets2004$ 170,0002003$ 97,5002002$ 87,000Operating Income$1,390,200$1,160,000$1,090,000Average Operating Income12.23%8.41%7.98%Operating Asset TurnoverNet SalesAverageOperatingAssets200420032002$1,600,000$1,300,000$1,200,000Net Sales$

22、1,390,200$1,160,000$1,090,000Average Operating Assets1.15 times1.12 times1.10 timesDuPont Analysis with operating ratiosReturn onTotal AssetAssets =Net Profit MarginxTurnover2004: 12.22%Rounding difference from the 12.23%, 8.41%, and 8.04% computed in 6. =10.63%x1.152003: 8.40%* =7.50%x1.122002: 8.0

23、3% =7.30%x1.109. Return on InvestmentNet Income Before Minority Share of Earnings and Nonrecurri ng Items (Interest Expense) x (1 - Tax Rate)s Equity)Average (Long - Term LiabilitieEstimated tax rate:2004 2003 2002b.(1) Provision for income taxes(2) Earnings before income taxes and Minority equity(1

24、) divided by (2)1 tax rate(3) Interest expense x (1-tax rate) $19,000 x 6.00%$18,200 x 59.00%$17,040 x 58.00%(4) Earnings before minority equity(3) plus (4) (A)(5) Total long-term debt(6) Total stockholders equity(5) plus (6) (B)(A) divided by (B)10. Return on Total EquityNet income etc. Average tot

25、al equity$ 62,049$ 159,10039.00%61.00%11,59097,051108,641211,100811,2001,022,30010.63%$ 35,731$ 87,15041.00%59.00%10,73851,41962,157212,800790,1001,002,9006.20%$ 32,659$ 77,76042.00%58.00%9,88345,10154,984214,000770,000984,0005.59%Net Income Before Nonrecurri ng Items - Dividends on Redeemable Prefe

26、rred StockAverage Total Equity2004 2003 2002$ 86,851$ 42,919$ 37,001$811,200$790,100$770,000All ratios computed indicate a significant improvement I profitability.PROBLEM 8-7a.1. Net Profit MarginNet Income Before Minority Share ofEarnings and Nonrecurri ng ItemsNet Sales200420032002$ 171,115$1,002,

27、100$163,497$980,500$143,990$900,000= 17.08%= 16.67%= 16.00%2.Return on AssetsNet IncomeEarningsBefore Minority Share of and Nonrecurri ng ItemsAverage Total Assets200420032002$171,115$839,000$163,497$770,000$143,990$765,000= 20.40%= 21.23%= 18.82%3.Total Asset TurnoverNetSales20042003AverageTotal As

28、sets2002$980,500$770,000$1,002,100$ 839,000$900,000$765,000= 1.19 times per year= 1.27 times per year= 1.18 times per year4.DuPont AnalysisReturn onAssets2004: 20.88%*2003: 21.17%*2002: 18.88%*xxxxOperating IncomeMargin17.08%16.67%16.00%Total AssetTurnover 1.19 times per year 1.27 times per year 1.1

29、8 times per year*Rounding difference from the 20.40%, 21.23%, and 18.82% computed in 2.10Net Income Before Minority Share of5. Return on InvestmentEarnings and Nonrecurri ng Items (Interest Expense)x( 1 - Tax Rate)Average (Long - Term Liabilitie s EquityEstimated tax rate:2004 20038,699$113,616$105,

30、560$277,113$249,55041.00%42.30%59.00%57.70%7,1396,491163,497143,990170,636150,481112,000101,000369,500342,000481,500443,00035.44%33.97%2002(1) Provision for income taxes(2) Earnings before income taxes tax rate (1) divided by (2) 1 tax rate(3) Interest expense x (1-tax rate)$14,620 x 59.50%$12,100 x

31、 59.00%$11,250 x 57.70%(4) Net earnings(3) plus (4)(A)(5) Average long-term debt(6) Average shareholders(5) plus (6)(B)(A) divided by (B)$116,473$287,58840.50%59.50%171,115179,814120,000equity 406,000526,00034.19%6. Return on EquityNet Income Before Nonrecurri ng Items -Dividends on Redeemable Prefe

32、rred StockAverage Total Equity2004 2003 2002Net earningsAverage total equity$171,115$163,497$143,990$406,000$369,500$342,0007. Sales to Fixed AssetsNet SalesAverage Net Fixed Assets20042003 2002$1,002,100$980,500$900,000$ 302,500$281,000$173,000= 3.31= 3.49= 5.2011b.The ratios computed indicate a ve

33、ry profitable firm. Most ratios indicate A very slight reduction in profitabilityin 2003.Sales to fixed assets has declined materially, but this is only ratio for which the trend appears to be negative.thePROBLEM 8-8a.1. Net Profit MarginNet Income Before Minority ShareEarnings and Nonrecurri ng Ite

34、msNet Sales2004$20,070-$8,028 $297,580= 4.05%2003$16,660-$6,830 $256,360= 3.83%2. Return on Assets2004$20,070-$8,028 $145,760= 8.26%3. Total Asset Turnover2002$15,380-$6,229$242,150= 3.78%Net Income Before Minority Share ofEarnings and Nonrecurri ng ItemsAverage2003 $16,660-$6,830$137,000= 7.18%Tota

35、l Assets2002$15,380-$6,229 $136,000= 6.73%Net SalesAverage Total Assets2004$297,580$145,760 = 2.04 timesper year2003$256,360$137,000 = 1.87 timesper year2002$242,150$136,000 = 1.78 timesper year124. DuPont AnalysisReturn onAssets 2004: 8.26% 2003: 7.16%* 2002: 6.73%Operating IncomeMargin4.05%3.83%3.

36、78%Total Asset x Turnover x2.04 timesx1.87 timesx1.78 times*Rounding difference from the 7.18% computed in 2.5. Operating Income Margin20042003$ 26,380$ 22,860$297,580$256,360= 8.86%= 8.92%6. Return on Operating Assets20042003$26,380 $ 22,860$89,800+$45,850= 19.45%7. Operating Asset2004$84,500+$40,3

37、00= 28.32%Turnover2003Operating IncomeNet Sales2002$ 20,180$242,150= 8.33%Operating IncomeAverage Operating Assets2002$ 20,180$83,100+$39,800= 16.42%Net SalesAverage Operating Assets2002$297,580 $256,360 $242,150$89,800 $45,850 $84,500 $40,300 $83,100 $39,800= 2.19 times= 2.05 times = 1.97 timesper

38、yearper year per year138. DuPont Analysis with Operating RatiosReturn onOperating IncomeTotal AssetAssets= MarginxTurnover2004: 19.40%*= 8.86%x2.19 times2003: 18.29%*= 8.92%x2.05 times2002: 16.41%*= 8.33%x1.97 times*Rounding difference from the 19.45%, 18.32%, and 16.42% computed in 6.9. Gross Profi

39、t MarginGross ProfitNet Sales2004$ 91,580$297,5802003$ 80,060$256,3602002$ 76,180$242,150= 30.77%= 31.23%= 31.46%b. Net profit margin and total asset turnover both improved. This resulted in a substantial improvement to return on assets.Operating income margin declined slightly in 2003 after a subst

40、antial improvement in 2002. Operating asset turnover improved each year. The result of the improvement in operating income margin and operating asset turnover was a substantial improvement in return on operating assets.Gross profit margin declined slightly each year.Overall profitability improved su

41、bstantially over the three-year period.PROBLEM 8-9a.on AssetsNet IncomeEarningsBefore Minority Share of and Nonrecurri ng ItemsAverageTotal Assets200420032002(A)$ 2,100,000$ 1,950,000$ 1,700,000$ 2,600,000$ 2,300,000$ 2,200,0007,000,0006,200,0005,800,000100,000100,000100,00010,000,0009,000,0008,300,

42、000(B)$19,700,000$17,600,000$16,400,000142. Return on InvestmentNet Income Earnings (InterestBefore Minority Share of and Nonrecurri ng Items Expense)x( 1 - Tax - Rate)Average (Long - Term Liabilities Equity)Estimated tax rate:200420032002(1) Provision for income taxes$ 1,500,000$ 1,450,000$ 1,050,0

43、00(2) Income before tax3,600,0003,400,0002,750,000tax rate = (1) divided by (2)41.67%42.65%38.18%1 tax rate58.33%57.35%61.82%(3) Interest expense x (1-tax rate)$80,000 x 58.33%$ 466,640$600,000 x 57.35%$ 344,100$550,000 x 61.82%$340,000(4) Net income$ 2,100,000$ 1,950,000$ 1,700,000(3) plus (4) (A)$

44、 2,566,640$ 2,294,100$ 2,040,010Long-term debt$ 7,000,000$ 6,200,000$ 5,800,000Preferred stock100,000100,000100,000Common equity10,000,0009,000,0008,300,000(B)$17,100,000$15,300,000$14,200,000(A) divided by (B)15.01%14.99%14.37%Net Income BeforeNonrecurri ng ItemsDividends on RedeemablePreferred Sto

45、ck3.Return on Total EquityAverage TotalEquity200420032002$2,100,000$1,950,000$1,700,000$100,000 $10,000,000 $100,000 $9,000,000$100,000$8,300,000= 20.79%= 21.43%= 29.24%Net IncomeBefore NonrecurringItems Preferred Dividends4.Return on Common EquityAverageCommon Equity200420032002$2,100,000 - $14,000

46、$1,950,000 - $14,000$1,700,000-$14,000$10,000,00 0$9,000,000$8,300,000= 20.86%= 21.51%= 20.31%15equityb.Return on assets improved in 2003 and then declined in 2004.Return on investment improved each year. Return on total improved and then declined. Return on common equity improved and then declined.

47、c.In general, profitability has improved in 2003 over 2002 but was down slightly in 2004.The use of long-term debt and preferred stock both benefited profitability.Return on common equity is slightly more than return on total equity, indicating a benefit from preferred stock.Return on total equity i

48、s substantially higher than return on investment, indicating a benefit from long-term debt.PROBLEM 8-10a. SalesGross profit (40%) Cost of goods sold (60%)Beginning inventory+ purchaseTotal available- Ending inventoryCost of goods soldEnding inventory (110,000-72,000)$120,00048,00072,000$ 10,000100,0

49、00110,000?$ 72,000$ 38,000b. If gross profit were 50%, the analysis would be as follows:SalesGross profit (50%)Cost of goods sold (50%)$120,00060,00060,000Beginning inventoryPurchasesTotal available- Ending inventory Cost of goods sold$ 10,000100,000$110,00050,000$ 60,000If gross profit were higher, the loss would be higher.16PROBLEM 8-11TotalNet Retained Stockholders a. a stock dividend isProfit Earnings Equitydeclared and paid.b. Merchandise is purchased on credit.c. Marketable securities