Question 2

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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

$ 566,400

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 %

$ 372,800

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 %

Inventory

$ 767,100

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 %

$ 607,800

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 %

Total assets

$3,124,300

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 %

$2,840,100

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 %

Question 3

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Vertical analysis (common-size) percentages for Vallejo Company’s sales, cost of goods sold, and expenses are listed here.

Vertical Analysis

2012

2011

2010

Sales

100

%

100

%

100

%

Cost of goods sold

61.3

64.2

65.2

Expenses

24.1

 

27.7

 

28.4

 

Did Vallejo’s net income as a percent of sales increase, decrease, or remain unchanged over the 3-year period? Provide numerical support for your answer.

Question 4

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Horizontal analysis (trend analysis) percentages for Spartan Company’s sales, cost of goods sold, and expenses are listed here.

Horizontal Analysis

2012

2011

2010

Sales

96.2

%

104.8

%

100.0

%

Cost of goods sold

101.0

98.0

100.0

Expenses

105.6

95.4

100.0

Explain whether Spartan’s net income increased, decreased, or remained unchanged over the 3-year period.

Question 5

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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

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

2009

2008

Current ratio:

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:1

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:1

Question 6

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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

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 times

Profit margin ratio

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 %

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Question 7

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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

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 times

Cash debt coverage ratio

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 times

Free Cash Flow

$http://edugen.wiley.com/edugen/art2/common/pixel.gif

 millions

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