Question: Gibraltar Industries is a Buffalo, New York–

> You have the opportunity to invest $10,000 in one of two companies from a single industry. The only information you have is below. Which company would you select? Justify your choice. Ratios for Current Year Company A Company B Industry Average Curre

> Company X and Company Y are two giants of the retail industry. Both offer full lines of moderately priced merchandise. In the last fiscal year, annual sales for Company X totaled $53 billion and annual sales for Company Y totaled $20 billion. Compare the

> California Pizza Kitchen opened its first restaurant in Beverly Hills in 1985. Almost immediately after the first location opened, it expanded from California to more than 250 locations in more than 30 states and 11 countries. California Pizza Kitchen co

> Ramesh Company has prepared preliminary financial results that are now being reviewed by the accountants. You notice that the current ratio is 2.4 and the quick ratio is 3.7. You recognize that this is unusual. Does it imply that a mistake has been made?

> Youngstown Corporation is considering changing its inventory method from FIFO to LIFO. Assume that inventory prices have been increasing. All else equal, what impact would you expect the change to have on the following ratios: net profit margin, fixed as

> Compute the component percentages for Lowe’s income statement below. Discuss any trends you observe. LOWE'S COMPANIES, INC. Consolidated Statements of Earnings (in millions, except per share and percentage data) Fiscal Years Ended o

> The following selected financial data pertain to four unidentified companies: The above financial information pertains to the following companies: a. Full-line department store b. Wholesale fish company c. Automobile dealer (low-priced used cars) d. Res

> The following selected financial data pertain to four unidentified companies: The above financial information pertains to the following companies: a. Cable TV company b. Grocery store c. Accounting firm d. High-end jewelry store Required: Match each co

> The following selected financial data pertain to four unidentified companies: The above financial information pertains to the following companies: a. Travel agency b. Hotel c. Meat processing company d. Drug company Required: Match each company with it

> The following selected financial data pertain to four unidentified companies: The above financial information pertains to the following companies: a. Cable TV company b. Grocery store c. Accounting firm d. High-end jewelry store Required: Match each co

> The following selected financial data pertain to four unidentified companies: The above financial information pertains to the following companies: a. High-end clothing store b. Advertising agency c. Wholesale candy company d. Car manufacturer Required:

> Dollar General Corporation operates general merchandise stores that feature quality merchandise at low prices. All stores are located in the United States, predominantly in small towns in 24 mid western and southeastern states. In the current year, the c

> Assume current assets totaled $120,000 and the current ratio was 1.5 before the following independent transactions: (1) Purchased merchandise for $40,000 on short-term credit. (2) Purchased a delivery truck for $25,000. Paid $3,000 cash and signed a two-

> Match each ratio or percentage with its computation. Ratios or Percentages Definitions 1. Net profit margin 2. Inventory turnover ratio A. Net Income + Net Sales Revenue 3. Average days to collect receivables 4. Dividend yield ratio 5. Return on equi

> From DuPont model. Using that framework, find the missing amount in each of the following cases: Case 1: ROE is 10 percent; net income is $200,000; the total asset turnover ratio is 5; and net sales are $1,000,000. What is the amount of average stockhold

> In this chapter, we discussed the importance of analyzing financial results based on an understanding of the company’s business strategy. Using the DuPont model, we illustrated how different strategies could earn high returns for investors. Assume that t

> Barton Company requested a large loan from First Federal Bank to acquire a tract of land for future expansion. Barton reported current assets of $1,900,000 ($430,000 in cash) and current liabilities of $1,075,000. First Federal denied the loan request fo

> Refer to the financial statements of American Eagle (Appendix B) and Urban Outfitters (Appendix C) and the Industry Ratio Report (Appendix D) at the end of this book. Compute the following ratios for fiscal 2014: return on equity, basic earnings per shar

> The following selected financial data pertain to four unidentified companies: The above financial information pertains to the following companies: a. Travel agency b. Hotel c. Meat processing company d. Drug company Required: Match each company with it

> Refer to the financial statements of Urban Outfitters given in Appendix C at the end of this book. Compute the following ratios for fiscal 2014: return on equity, basic earnings per share, net profit margin, inventory turnover, current ratio, debt-to-equ

> Refer to the financial statements of American Eagle Outfitters given in Appendix B at the end of this book. Compute the following ratios for fiscal 2014: return on equity, basic earnings per share, net profit margin, inventory turnover, current ratio, de

> The comparative financial statements for Summer Corporation are below: Required: 1. Complete the following columns for each item in the preceding comparative financial statements: INCREASE (DECREASE) from Year 1 to Year 2 Amount Percent 2. By what am

> Tabor Company has just prepared the following comparative annual financial statements for the current year: Required: 1. For the current year, compute the turnover, liquidity, and solvency ratios in Exhibit 13.3. Assume cash flows from operating activit

> Using the financial information presented in Exhibit 13.1, calculate the following ratios for The Home Depot: · Net profit margin · Earnings quality · Receivable turnover · Cash ratio Â&middot

> Coke and Pepsi are well-known international brands. Coca-Cola sells more than $46 billion worth of products each year while annual sales of PepsiCo products exceed $67 billion. Compare the two companies as a potential investment based on the following ra

> Use the data given in Alternate Problem 5 for Summer Corporation. Data given in Alternate Problem 5: The comparative financial statements for Prince Company are below: Required: 1. Compute component percentages for Year 2. 2. Compute the ratios in the

> What are noncash investing and financing activities? Give two examples. How are they reported on the statement of cash flows?

> Compare the two methods of reporting cash flows from operating activities in the statement of cash flows.

> Explain why a $50,000 increase in inventory during the year must be included in developing cash flows from operating activities under both the direct and indirect methods.

> The following selected financial data pertain to four unidentified companies: The above financial information pertains to the following companies: a. High-end clothing store b. Advertising agency c. Wholesale candy company d. Car manufacturer Required:

> Explain why cash payments during the period for purchases and for salaries are not specifically reported as cash outflows on the statement of cash flows, under the indirect method.

> What are the major categories of business activities reported on the statement of cash flows? Define each of these activities.

> What are cash equivalents? How are purchases and sales of cash equivalents reported on the statement of cash flows?

> What information does the statement of cash flows report that is not reported on the other required financial statements?

> Compare the purposes of the income statement, the balance sheet, and the statement of cash flows.

> How is the sale of equipment reported on the statement of cash flows under the indirect method?

> Sharp Screen Films, Inc., is developing its annual financial statements at December 31, current year. The statements are complete except for the statement of cash flows. The completed comparative balance sheets and income statement are summarized as foll

> Hanks Company is developing its annual financial statements at December 31, current year. The statements are complete except for the statement of cash flows. The completed comparative balance sheets and income statement are summarized as follows: Additio

> XS Supply Company is developing its annual financial statements at December 31, current year. The statements are complete except for the statement of cash flows. The completed comparative balance sheets and income statement are summarized: Additional Dat

> Omega Company’s accountants have just completed the income statement and balance sheet for the year and have provided the following information (dollars in thousands): Other Data: The company issued $30,000, 8 percent bonds payable at p

> Cintas designs and manufactures uniforms for corporations throughout the United States and Canada. The company’s stock is traded on the NASDAQ. Selected information from the company’s financial statements follows. Req

> Use the information concerning Sharp Screen Films, Inc., provided in Problem 1 to fulfill the following requirements. Data from Problem 1: Sharp Screen Films, Inc., is developing its annual financial statements at December 31, current year. The statemen

> BG Wholesalers is developing its annual financial statements at December 31, current year. The statements are complete except for the statement of cash flows. The completed comparative balance sheets and income statement are summarized: Additional Data:

> Refer to the following summarized income statement and additional selected information for Trumansburg, Inc.: Income Statement Revenues ………………………………………….$150,800 Cost of sales ………………………………………….55,500 Gross margin ………………………………………..95,300 Salary expense ……

> Refer to the information for Rodriguez Company in Exercise 8. Data given in Exercise 8: Rodriguez Company completed its income statement and comparative balance sheet for the current year and provided the following information: In addition, Rodriguez bo

> Refer to the information for Peak Heights Company in Exercise 7. Data from Exercise 7: The following information pertains to Peak Heights Company: Required: Present the operating activities section of the statement of cash flows for Peak Heights Compan

> An analysis of Courtney Corporation’s operational asset accounts provided the following information: a. Acquired a large machine that cost $36,000. Courtney paid for it by giving a $15,000, 12 percent interest-bearing note due at the end of two years and

> Computer Service and Repair was started five years ago by two college roommates. The company’s comparative balance sheets and income statement are presented below, along with additional information. Additional Data: a. Prepaid expenses

> Shallow Waters Company was started several years ago by two diving instructors. The company’s comparative balance sheets and income statement are presented below, along with additional information. Additional Data: a. Prepaid expenses r

> Oering’s Furniture Corporation is a Virginia-based manufacturer of furniture. In a recent year, it reported the following activities: Net income …………………………………………………………………….$ 5,135 Purchase of property, plant, and equipment ……………………….1,071 Borrowings unde

> Answer the questions below. Treat each case as being independent from the other cases. Case A: The charter for Rogers, Incorporated, authorized the following stock: Common stock, $10 par value, 103,000 shares authorized Preferred stock, 9 percent, $8 par

> A recent annual report for PepsiCo contained the following information for the period (dollars in millions): Net income …………………………………………………………….$6,462 Depreciation and amortization …………………………………...2,737 Increase in accounts receivable ……………………………………666 I

> During the period, Sanchez Company sold some excess equipment at a loss. The following information was collected from the company’s accounting records: From the Income Statement Depreciation expense …………………………….$ 1,500 Loss on sale of equipment ………………………

> During two recent years Perez Construction, Inc., disposed of the following plant and equipment: Required: 1. Determine the cash flow from the sale of property for each year that would be reported in the investing activities section of the cash flow sta

> Time Warner Inc. is a leading media and entertainment company with businesses in television networks, filmed entertainment, and publishing. The company’s recent annual report contained the following information (dollars in millions): Net loss………………………………

> Rodriguez Company completed its income statement and comparative balance sheet for the current year and provided the following information: In addition, Rodriguez bought a small service machine for $5,000. Required: 1. Present the operating activities s

> To compare statement of cash flows reporting under the direct and indirect methods, enter check marks to indicate which items are used with each method. STATEMENT OF CASH FLOWS METHOD Cash Flows (and Related Changes) Direct Indirect 1. Accounts payab

> Hewlett-Packard is a leading manufacturer of computer equipment for the business and home markets. For each of the following recent transactions, indicate whether net cash inflows (outflows) from operating activities (NCFO), investing activities (NCFI),

> Stanley Furniture Company is a Virginia-based furniture manufacturer. For each of the following firstyear transactions, indicate whether net cash inflows (outflows) from operating activities (NCFO), investing activities (NCFI), or financing activities (N

> Woolworths Limited is one of the largest retailers in Australia and New Zealand. Some of the items included in its recent annual consolidated statement of cash flows presented using the direct method are listed here. Indicate whether each item is disclos

> EMC Corporation helps store, manage, protect, analyze, and secure information for companies that use cloud computing. Some of the items included in its recent annual consolidated statement of cash flows presented using the direct method are listed here.

> Diageo is a major international company located in London, best known for its Smirnoff, Johnnie Walker, and Guinness brands of spirits. Its financial statements are accounted for under IFRS. A recent annual report contained the following information conc

> Reebok International Ltd. is a global company that designs and markets sports and fitness products, including footwear, apparel, and accessories. Some of the items included in its recent annual consolidated statement of cash flows presented using the ind

> Golf Universe is a regional and online golf equipment retailer. The company reported the following for the current year: Purchased a long-term investment for cash, $15,000. Paid cash dividend, $12,000. Sold equipment for $6,000 cash (cost, $21,000; accum

> Presented in alphabetical order below are the line items including the subtotals and totals from Pool Corporation’s recent statement of cash flows prepared using the indirect method. Using these line items, prepare Pool Corporation&acir

> Carlyle Golf, Inc., was formed in September of last year. The company designs, contracts for the manufacture of, and markets a line of men’s golf apparel. A portion of the statement of cash flows for Carlyle follows: CURRENT YEAR Cash flows from operatin

> Rocky Mountain Chocolate Factory manufactures an extensive line of premium chocolate candies for sale at its franchised and company-owned stores in malls throughout the United States. Its balance sheet for the first quarter of a recent year is presented

> In a February 19, 2004, press release, the Securities and Exchange Commission described a number of fraudulent transactions that Enron executives concocted in an effort to meet the company’s financial targets. One particularly well-known scheme is called

> Refer to the financial statements of American Eagle Outfitters in Appendix B and Urban Outfitters in Appendix C. Financial statements of American Eagle: Financial statements of Urban Outfitters: Required: 1. Compute the quality of income ratio for both

> Refer to the financial statements of Urban Outfitters in Appendix C at the end of this book Financial statements of Urban Outfitters: Required: 1. Does Urban Outfitters use the direct or indirect method to report cash flows from operating activities? 2

> Refer to the financial statements of American Eagle Outfitters in Appendix B at the end of this book. Financial Statement of American Eagle Outfitters: Required: 1. On the statement of cash flows, what was the largest item (in absolute value) listed und

> Use the information concerning Ingersol Construction Supply Company provided in Alternate Problem 1 to fulfill the following requirements. Data from Problem 1: Ingersol Construction Supply Company is developing its annual financial statements at Decembe

> On January 1 of the current year, Sheena Company purchased 30 percent of the outstanding common stock of Maryn Corporation at a total cost of $485,000. Management intends to hold the stock for the long term. On the current year’s December 31 balance shee

> Coke and Pepsi are well-known international brands. Coca-Cola sells more than $46 billion worth of products each year while annual sales of PepsiCo products exceed $67 billion. Compare the two companies as a potential investment based on the following ra

> Canada weathered the global financial crisis and recession better than many of its peers, principally as a result of the better policies and regulations already in place. Canada was in a much stronger position going into the recession thanks to its low a

> Suppose that capital income taxes are based (as they are in Canada and most countries) on nominal interest rates. If the inflation rate increases by 5 percent a year, explain and use appropriate graphs to illustrate the effect of the rise in inflation on

> Suppose that investment is $160 billion, saving is $140 billion, government expenditure on goods and services is $150 billion, exports are $200 billion, and imports are $250 billion. a. Is the government’s budget exerting a positive or negative impact on

> Suppose that investment is $160 billion, saving is $140 billion, government expenditure on goods and services is $150 billion, exports are $200 billion, and imports are $250 billion. What is the amount of tax revenue? What is the government budget balanc

> Eurozone unemployment rose to 10.7 percent. At the same time, Eurozone inflation unexpectedly rose to 2.7 percent a year, up from the previous month’s 2.6 percent a year. a. How does the Phillips curve model account for a very high unemployment rate? b.

> Suppose that the velocity of circulation of money is constant and real GDP is growing at 3 percent a year. a. To achieve an inflation target of 2 percent a year, at what rate would the central bank grow the quantity of money? b. At what growth rate of th

> The economy starts out on the curves labelled AD0 and SAS0 Some events occur and the economy is expected to experience inflation.What might those events have been? Describe their initial effects and what happens as an expected inflation proceeds. L

> The economy starts out on the curves labelled AD0 and SAS0. Some events occur and the economy experiences a cost-push inflation. What might those events have been? Describe their initial effects and explain how a cost-push inflation spiral develops.

> The economy starts out on the curves labelled AD0 and SAS0. Some events occur and the economy experiences a demand-pull inflation. What might those events have been? Describe their initial effects and explain how a demand-pull inflation spiral results.

> On top of rising energy prices, a severe drought, bad harvests, and a poor monsoon season in Asia have sent grain prices soaring. Globally, this is the third major food price shock in five years. Explain what type of inflation the news clip is describing

> How can deflation be ended?

> What is the cause of the high unemployment rate? One side says there is not enough government spending. The other says it’s a structural problem—people who can’t move to take new jobs because they are tied down to burdensome mortgages or firms that can’t

> If the expected inflation rate increases by 10 percentage points, how do the short-run Phillips curve and the long-run Phillips curve change?

> How would you use the Phillips curve to illustrate an unexpected change in inflation?

> The pace of German economic growth has weakened “markedly,” but the reason is the weaker global prospects. Although German policymakers worry about the country’s exposure to a fall in demand for its export goods, evidence is growing that the recovery is

> Answer the following questions. a. What are the macroeconomic problems in the Eurozone economy that the ECB is seeking to address? b. Is the European unemployment problem structural, cyclical, or both, and how can we determine its type? c. Explain which

> Despite higher-than-forecast inflation, Bank of Canada Governor Mark Carney said he may keep interest rates low beyond when full output is restored as the domestic recovery is hobbled by a weak economy in the United States, the nation’s biggest trade par

> The indication is that inflationary expectations have become entrenched and strongly rooted in world markets. As a result, the risk of global stagflation has become significant. A drawn-out inflationary process always precedes stagflation. Following the

> The Reserve Bank of New Zealand signed an agreement with the New Zealand government in which the Bank agreed to maintain inflation inside a low target range. Failure to achieve the target would result in the governor of the Bank losing his job. Explain h

> The Reserve Bank of New Zealand signed an agreement with the New Zealand government in which the Bank agreed to maintain inflation inside a low target range. Failure to achieve the target would result in the governor of the Bank losing his job. Explain h

> An economy has an unemployment rate of 4 percent and an inflation rate of 5 percent a year at point A in the figure. Then some events occur that move the economy from A to B to D to C and back to A. In the graph, draw the sequence of the economyâ&

> What causes deflation?

> An economy has an unemployment rate of 4 percent and an inflation rate of 5 percent a year at point A in the figure. Then some events occur that move the economy from A to B to D to C and back to A. Describe the events that could create this sequence. H

> The United States is planning to push Europe towards new and more aggressive efforts to boost aggregate demand given a renewed risk of deflation in the Eurozone. a. Explain the process by which deflation occurs. b. How might Europe boost its aggregate de

> What are the consequences of deflation?

> John H. Cochrane, a professor of finance at the University of Chicago, thinks we face the risk of inflation, and if inflation does break out the Fed will not have the ability to stop it and it will “bring stagnation rather than prosperity.” The source of