The following are the balance sheet and income statement data of PROSPERITY INC.Balance Sheet Accounts (December31)CashMarketable SecuritiesAccounts Receivable-net................InventoriesLand......Building - netMachinery and Equipment-net............Other AssetsPrepaid ExpensesNotes Payable, TradeAccounts Payable, Trade...........Expenses PayableLong Term Notes Due 2025.15% Preferred Stock, P100 par.............Common Stock, P10 par...Retained Earnings***********...20 x 2 Income Statement AccountsSales...Sales Returns and allowancesInventory, December 31, 20 x 2Inventory, December 31, 20 x 1...PurchasesSelling Expenses.....Additional Information:Dividends paid on preferred stockDividends paid on common stockMarket price per share on common stockP20 X 2Working CapitalCurrent RatioAcid Test RatioReceivable Turn-overAge of Receivables (use 365 days)Inventory Turn-overWorking Capital Turn-over150,000850,000500,000750,000500,000550,0001,700,000400,000100,000100,000610,00040,000Profit margin RatioAsset Turn-over RatioReturn on Owners' Equity2,500,000500,0001,500,000250,00020 X 1283,0001,000,0001,000,000500,000500,000500,0001,500,000400,00090,000150,000790,00060,000Make an investment analysis for 20 X 2 by computingEquity RatioReturn on Investment (ROI)Payback period2,250,000500,0001,500,000523,000250,000400,000Administrative Expenses (including Depreciation P250,000).... 600,000Interest on Long term Notes............. 250,000Income Taxes, 35%5,250,000750,000500,000REQUIREMENTS: Prepare the following REPORTS in GOOD FORM:Prepare comparative balance sheets for 20 x 2 and 20 x 1, showing peso and percentageincreases or decreases (Horizontal Analysis).Prepare income statement for the year ended December 31, 20 x 2 with common sizepercentages (Vertical Analysis).B. Evaluate the firm's long term solvency for 20x 2 by computingDebt to Equity RatioPrepare comparative common-size balance sheets as of December 31, 20 x 2 and 20 x 1(Vertical Analysis)A. Evaluate the firm's short-term solvency for 20 x 2 by computing:Evaluate the firm's operational efficiency for 20 x 2 by computingGross margin Ratio2,750,00075,000162,00018

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REQUIREMENTS: Prepare the following REPORTS in GOOD FORM: Prepare comparative balance sheets for 20 x 2 and 20 x 1, showing peso and percenta increases or decreases (Horizontal Analysis). Prepare income statement for the year ended December 31, 20 x 2 with common size percentages (Vertical Analysis). Prepare comparative common-size balance sheets as of December 31, 20 x 2 and 20 x (Vertical Analysis) A. Evaluate the firm's short-term solvency for 20 x 2 by computing: Working Capital Current Ratio Acid Test Ratio Receivable Turn-over Age of Receivables (use 365 days) Inventory Turn-over Working Capital Turn-over

REQUIREMENTS: Prepare the following REPORTS in GOOD FORM: Prepare comparative balance sheets for 20 x 2 and 20 x 1, showing peso and percenta increases or decreases (Horizontal Analysis). Prepare income statement for the year ended December 31, 20 x 2 with common size percentages (Vertical Analysis). Prepare comparative common-size balance sheets as of December 31, 20 x 2 and 20 x (Vertical Analysis) A. Evaluate the firm's short-term solvency for 20 x 2 by computing: Working Capital Current Ratio Acid Test Ratio Receivable Turn-over Age of Receivables (use 365 days) Inventory Turn-over Working Capital Turn-over

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter12: Fainancial Statement Analysis

Section: Chapter Questions

Problem 13MCQ

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