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Global Campus Ratio Analysis Exercises and Problems
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OPTION 1: RATIO ANALYSIS EXERCISES AND PROBLEMS
Use the net income statement for Summer Peebles, Inc., below, to do the following assigned problems.
Compute the following earnings coverage ratios:
Earnings to fixed charges.
Cash flow to fixed charges.
Earnings coverage of preferred dividends.
Analyze and interpret the earnings coverage ratios in (A).
Summer Peebles, Inc. Consolidated Income Statement ($ thousands)
Year Ending December 31, 2015
Sales
$15,000.00
Undistributed Income of Less Than 50%-Owned Affiliates
$300.00
Total Revenue
$15,300.00
Cost of Goods Sold
$7,000.00
Selling and Administrative Expenses
$2,000.00
Depreciation
$600.00
Rental Expense
$500.00
Share of Minority Interest in Consolidated Income
$200.00
Interest Expense
$400.00
-$10,700.00
Income Before Taxes
$4,600.00
Income Taxes
Current
$900.00
Deferred
$400.00
-$1,300.00
Net Income
$3,300.00
Less Dividends
Common Stock
$300.00
Preferred Stock
$400.00
-$700.00
Earnings Retained for the Year
$2,600.00
Additional Information:
The following changes occurred in current assets and current liabilities for 2015: Current Accounts Increase (Decrease)Current Accounts Increase (Decrease)Accounts Receivable $900.00Notes Payable to Bank-$200.00Inventories-$800.00Accounts Payable $700.00Dividend Payable-$100.00
The effective tax rate is 40%.
Shares of minority interests in consolidated income do not have fixed charges.
Interest expenses include: Interest Incurred (Except Items Below) $600.00Amortization of Bond Premium-$300.00Interest on Capitalized Leases $140.00Interest Incurred $440.00Less Interest Capitalized-$40.00Interest Expense $400.00
Amortization of previously capitalized interest (included in depreciation) is $60.
Interest implicit in operating lease rental payment (included in rental expense) is $120.
Global Campus Ratio Analysis Exercises and Problems
RUBRIC |
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Introduction
45-41 points The background and significance of the problem and a clear statement of the research purpose is provided. The search history is mentioned. |
Literature Support 91-84 points The background and significance of the problem and a clear statement of the research purpose is provided. The search history is mentioned. |
Methodology 58-53 points Content is well-organized with headings for each slide and bulleted lists to group related material as needed. Use of font, color, graphics, effects, etc. to enhance readability and presentation content is excellent. Length requirements of 10 slides/pages or less is met. |
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Average Score 50-85% |
40-38 points More depth/detail for the background and significance is needed, or the research detail is not clear. No search history information is provided. |
83-76 points Review of relevant theoretical literature is evident, but there is little integration of studies into concepts related to problem. Review is partially focused and organized. Supporting and opposing research are included. Summary of information presented is included. Conclusion may not contain a biblical integration. |
52-49 points Content is somewhat organized, but no structure is apparent. The use of font, color, graphics, effects, etc. is occasionally detracting to the presentation content. Length requirements may not be met. |
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Poor Quality 0-45% |
37-1 points The background and/or significance are missing. No search history information is provided. |
75-1 points Review of relevant theoretical literature is evident, but there is no integration of studies into concepts related to problem. Review is partially focused and organized. Supporting and opposing research are not included in the summary of information presented. Conclusion does not contain a biblical integration. |
48-1 points There is no clear or logical organizational structure. No logical sequence is apparent. The use of font, color, graphics, effects etc. is often detracting to the presentation content. Length requirements may not be met |
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Global Campus Ratio Analysis Exercises and Problems |
Global Campus Ratio Analysis Exercises and Problems