Q1. Determining inventory turnover
On January 1, 2017, River Company's inventory was $400,000. During 2017, the company purchased $1,900,000 of additional inventory, and on December 31, 2017, its inventory was $500,000.
Required: What is the inventory turnover for 2017?
Q2. Determining receivable turnover
Utica Company's net accounts receivable was $250,000 at December 31, 2016, and $300,000 at December 31, 2017. Net cash sales for 2017 were $100,000. The accounts receivable turnover for 2017 was 5.0, which was computed from net credit sales for the year.
Required: What was Utica's total net sales for 2017?
Q3. Calculating interest coverage
The following data were taken from the financial records of Glum Corporation for 2017:
Sales $3,600,000
Bond interest expense 120,000
Income taxes 600,000
Net income 800,000
Required: How many times was bond interest earned in 2017?
Q4. Calculating days sales outstanding
Selected information taken from the accounting records of Vigor Company follows:
Net accounts receivable at December 31, 2016 - $ 900,000
Net accounts receivable at December 31, 2017 - $1,000,000
Accounts receivable turnover - 5 to 1
Inventories at December 31, 2016 - $1,100,000
Inventories at December 31, 2017 - $1,200,000
Inventory turnover - 4 to 1
Required:
1. What was Vigor's gross profit for 2017?
2. Suppose that there are 360 business days in the year. What were the number of days sales outstanding in average receivables and the number of days sales outstanding in average inventories, respectively, for 2017?
Q5. Determining profitability
Nucor Corporation produces steel and steel products at its eight mills and is a major recycler of scrap metal. The following relate to Nucor for four years.
|
Nucor Corporation
|
|
($ in millions)
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2011
|
2012
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2013
|
2014
|
|
Total assets
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$14,570.4
|
$14,152.1
|
$15,203.3
|
$15,615.9
|
|
Common stockholders' equity
|
7,706.6
|
7,885,4
|
7,910.3
|
8,075.1
|
|
Total debt
|
4,282.0
|
3,660.1
|
4,409.9
|
4,584.4
|
|
Sales
|
|
19,429.3
|
19,052.0
|
21,105.1
|
|
Net income
|
|
593.1
|
585.5
|
815.8
|
|
Interest expense
|
|
162.4
|
146.9
|
169.3
|
|
Income tax rate
|
|
0.37
|
0.37
|
0.37
|
Required:
1. Calculate Nucor's ROA for 2012, 2013, and 2014. Decompose ROA into operating profit margin and asset turnover components.
2. Has Nucor's profitability changed over the three years? If so, how?
3. Calculate the rate of return on common stockholders' equity for 2012, 2013, and 2014.
4. What seem to be the reasons for the change in ROCE over the three years?
Attachment:- Assignment Files.rar