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Ratio Analysis, Cash Debt Coverage Ratio, FCF

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Using the data from the comparative balance sheet of Rosalez Company, perform horizontal analysis. (If amount and percentage are a decrease show the numbers as negative, e.g. -55,000, -20% or (55,000), (20%). Round percentages to 0 decimal places, e.g. 12%.)

Increase or (Decrease)

Dec. 31, 2012 Dec. 31, 2011 Amount percentage

Accounts receivable $ 517,900 $ 440,200 ? ?

Inventory $ 826,900 $ 580,800 ? ?

Total assets $3,156,200 $2,763,400 ? ?


Brief Exercise 13-5

Using these data from the comparative balance sheet of Rosalez Company, perform vertical analysis. (Round percentages to 1 decimal place, e.g. 12.5%.)

Dec. 31, 2012 Dec. 31, 2011
Amount Percentage Amount Percentage

Accounts receivable $ 558,900 ? $ 441,400 ?

Inventory $ 825,500 ? $ 595,300 ?

Total assets $3,110,200 ? $2,843,700 ?


Brief Exercise 13-10

These selected condensed data are taken from recent balance sheets of Bob Evans Farms (in thousands).

2009 2008

Cash $ 13,606 $ 7,669
Accounts receivable 23,045 19,951
Inventories 31,087 31,345
Other current assets 12,522 11,909
-------------- --------------
Total current assets $ 80,260 $ 70,874
-------------- --------------
Total current liabilities $245,805 $326,203

(a) Compute the current ratio for each year. (Round answers to 2 decimal places, e.g. .12 : 1.)

2009 2008
Current ratio: ? :1 ? :1


Brief Exercise 13-13

Staples, Inc. is one of the largest suppliers of office products in the United States. It had net income of $738.7 million and sales of $24,275.5 million in 2009. Its total assets were $13,073.1 million at the beginning of the year and $13,717.3 million at the end of the year. What is Staples, Inc.'s asset turnover ratio and profit margin ratio? (Round answers to 2 decimal places, e.g. 1.25 or 2.05%.)

Asset turnover ratio ? times
Profit margin ratio ? %


Brief Exercise 13-15

Selected data taken from a recent year's financial statements of trading card company Topps Company, Inc. are as follows (in millions).

Net sales $326.7
Current liabilities, beginning of year 41.1
Current liabilities, end of year 62.4
Net cash provided by operating activities 10.4
Total liabilities, beginning of year 65.2
Total liabilities, end of year 73.2
Capital expenditures 3.7
Cash dividends 6.2

Compute these ratios: current cash debt coverage ratio, cash debt coverage ratio, and free cash flow. Provide a brief interpretation of your results. (Round answers to 2 decimal places, e.g. 0.12.)

Current cash debt coverage ratio ? times
Cash debt coverage ratio ? times
Free Cash Flow $ ? millions

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Solution Summary

The solution provides an example of horizontal & vertical analysis of Balance Sheet. Its also provide for computation of Cash Debt Coverage Ratio, FCF, Currebt Cash Debt Coverage Ratio as well as Asset Turnover Ratio. Profit Margin Ratio and Current Ratio.

Similar Posting

The financial statements of Amazon.com

The incredible growth of Amazon.com has put fear into the hearts of traditional retailers. Amazon.com's stock price has soared to amazing levels. However, it is often pointed out in the financial press that the company has never reported a profit for the year. The following financial information is taken from the 2001 financial statements of Amazon.com

Please see attached file.

($ in millions) 2001 2000
Current assets $1,207.90 $1,361.10
Total assets 1,637.50 2,135.20
Current liabilities 921.4 975
Total liabilities 3,077.50 3,102.40
Cash provided by operations -119.8 -130.4
Capital expenditures 50.3 134.8
Dividends paid 0 0
Net loss -567.3 -1,411.30
Sales 3,122.40 2,762.00

a) Calculate the current ratio and current cash debt coverage ratio for Amazon.com for 2001 and discuss its liquidity.
b) Calculate the cash debt coverage ratio and the debt to total assets ratio for Amazon.com for 2001 and discuss its solvency.
c) Calculate free cash flow for Amazon.com for 2001 and discuss its ability to finance expansion from internally generated cash. Thus far Amazon.com has avoided purchasing large warehouses. Instead, it has used those of others. It is possible, however, that in order to increase customer satisfaction the company may have to build its own warehouses. If this happens, how might your impression of its ability to finance expansion change?
d) Discuss any potential implications of the change in Amazon.com's cash provided by operations and its net loss from 2000 to 2001.
e) Based on your findings in parts (a) through (d), can you conclude whether or not Amazon.com's amazing stock price is justified?

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