财务报表分析第08章答案

财务报表分析第08章答案
Chapter 8 Profitability
PROBLEMS
PROBLEM 8-1 Net Profit Margin = Sales Net Items
ng Nonrecurri and Earnings of Share Minority Before Income Net
2004
2003
$1,050,000
$52,500
$1,000,000
$40,000
5.00% 4.00%
Return on Assets = Assets Total Average Items
ng Nonrecurri and Earnings of Share Minority Before Income Net
2004
2003
$230,000
$52,500
$200,000
$40,000
22.83% 20.00%
Total Asset Turnover = Assets
Total Average Sales
Net
2004
2003
$230,000
$1,050,000
$200,000
$1,000,000
4.57 times
5.00 times
per year per year
= Return on Common Equity = Equity Common Average Dividends
Preferred Minus Items Noncurring Before Income Net
2004
2003
$170,000
$52,500
$160,000
$40,000
30.88% 25.00%
Ahl Enterprise has had a substantial rise in profit to sales. This is somewhat tempered by a reduction in asset turnover. Given a slight rise in common equity, there is a substantial rise in return on common equity.
PROBLEM 8-2
Vent Molded Plastics Vent Molded
Plastics Sales
Sales returns
Cost of goods sold Selling expense General expense Other income Other expense Income tax Net income 101.0% 7.0 72.1 9.4 7.0 .4 1.5 4.8 5.6%
100.3% .3 67.1 10.1 7.9 .4 1.3 5.5 8.5%
Sales returns are higher than the industry. Cost of sales is much higher, offset some by lower operating expenses. Other
expense (perhaps interest) is somewhat higher. Lower taxes are perhaps caused by lower income. Overall profit is less, primarily due to cost of sales.
PROBLEM 8-3 a. 1. Net Profit Margin = Sales
Net Items
ng Nonrecurri and Earnings of Share Minority Before Income Net
2004
2003
2002
$1,600,000$97,051
$1,300,000$51,419
$1,200,000$45,101
= 6.07%
= 3.96%
= 3.76%
2. Return on Assets = Assets
Total Average Item
ng Nonrecurri and Earnings of Share Minority Before Income Net
2004
2003
2002
$1,440,600$97,051
$1,220,000$51,419
$1,180,000$45,101
= 6.04%
= 4.21%
= 3.82%
3. Total Asset Turnover =
Assets
Total Average Sales
Net
2004
2003
2002
$1,440,600$1,600,000
$1,220,000$1,300,000 $1,180,000$1,200,000
= 1.11 times per year
= 1.07 times per year = 1.02 times per year
4. DuPont Analysis
Return on Assets =
Net Profit Margin
x Total Asset Turnover 2004: 6.74% 2003: 4.24% 2002: 3.84% = = =
6.07% 3.96%* 3.76%*
x x x
1.11 times 1.07 times 1.02 times
*Rounding difference from the 4.21% and 3.82% computed in 2.
5. Operating Income Margin =
Sales
Net Income
Operating
2004
2003
2002
(2) Net sales Less:
Material and manufacturing costs of products sold Research and development General and selling
(1) Operating income
(1) Dividend by (20)
$1,600,000
740,000 90,000 600,000 1,430,000 170,000
10.63%
$1,300,000
624,000 78,000 500,500 1,202,500 97,500
7.50%
$1,200,000
576,000 71,400 465,000 1,112,400 87,600
7.30%
6. Return on Operating Assets =
Assets
Operating Average Income
Operating
2004
2003
2002
Operating Income_____ Average Operating Income $ 170,000 $1,390,200
12.23%
$ 97,500 $1,160,000
8.41%
$ 87,000 $1,090,000
7.98%
7. Operating Asset Turnover =
Assets
Operating Average Sales
Net
2004
2003
2002
Net Sales_________ Average Operating Assets $1,600,000 $1,390,200 1.15 times
$1,300,000 $1,160,000
1.12 times
$1,200,000 $1,090,000
1.10 times
8. DuPont Analysis with operating ratios
Return on Assets
=
Net Profit Margin
x Total Asset Turnover 2004: 12.22%* 2003: 8.40%* 2002: 8.03% = = =
10.63% 7.50% 7.30%
x x x
1.15 1.12 1.10
*Rounding difference from the 12.23%, 8.41%, and 8.04% computed in 6.
9. Equity)
s Liabilitie Term -(Long Average Rate)]
Tax -(1 x Expense) [(Interest Items ng Nonrecurri and Earnings of Share Minority Before Income Net Investment on Return ++=
Estimated tax rate:
2004 2003
2002
(1) Provision for income taxes (2) Earnings before income taxes and Minority equity
(1) divided by (2) 1 – tax rate
(3) Interest expense x (1-tax rate) $19,000 x 61.00% $18,200 x 59.00% $17,040 x 58.00%
(4) Earnings before minority equity (3) plus (4) (A)
(5) Total long-term debt
(6) Total stockholders’ equity (5) plus (6) (B)
(A) divided by (B)
$ 62,049 $ 159,100 39.00% 61.00% 11,590 97,051 108,641 211,100 811,200 1,022,300 10.63%
$ 35,731
$ 87,150
41.00% 59.00%
10,738
51,419 62,157
212,800 790,100 1,002,900
6.20%
$ 32,659
$ 77,760
42.00% 58.00%
9,883
45,101 54,984
214,000 770,000 984,000
5.59%
10. Equity
Total Average Stock
Preferred Redeemable on Dividends -Items ng Nonrecurri Before Income Net Equity Total on Return =
2004
2003
2002
Net income etc.
Average total equity
$ 86,851 $ 42,919
$ 37,001 b. All ratios computed indicate a significant improvement I profitability.
PROBLEM 8-4 a. 1. Sales Net Items
ng Nonrecurri and Earnings of
Share Minority Before Income Net Margin Profit Net =
2004 2003 2002
$ 171,115
= 17.08%
$163,497
= 16.67%
$143,990
= 16.00%
2. Assets
Total Average Items
ng Nonrecurri and Earnings of Share Minority Before Income Net Assets on Return =
2004 2003
2002
$171,115 $839,000
= 20.40%
$163,497 $770,000
= 21.23%
$143,990 $765,000
= 18.82%
3. Assets
Total Average Sales
Net Turnover Asset Total
=
2004 2003 2002 $1,002,100 $ 839,000
= 1.19 times per year
$980,500 $770,000
= 1.27 times per year $900,000 $$765,000
= 1.18 times per year
4. DuPont Analysis
Return on Assets
= Operating Income Margin x Total Asset
Turnover
2004: 20.88%* 2003: 21.17%* 2002: 18.88%*
= = = 17.08% 16.67% 16.00% x x x
1.19 times per year 1.27 times per year 1.18 times per year
*Rounding difference from the 20.40%, 21.23%, and 18.82% computed in 2.
5. Equity
s Liabilitie Term -(Long Average Rate)]
Tax -1Expense)x( [(Interest Items ng Nonrecurri and Earnings of Share Minority Before Income Net Investment on Return += Estimated tax rate:
2004
2003
2002
(1) Provision for income taxes (2) Earnings before income taxes tax rate [(1) divided by (2)] 1 – tax rate
(3) Interest expense x (1-tax rate) $14,620 x 59.50% $12,100 x 59.00% $11,250 x 57.70%
(4) Net earnings
(3) plus (4) (A)
(5) Average long-term debt
(6) Average shareholders’ equity (5) plus (6) (B)
(A) divided by (B)
$116,473 $287,588 40.50% 59.50%
8,699
171,115 179,814
120,000 406,000 526,000
34.19%
$113,616 $277,113 41.00% 59.00%
7,139
163,497 170,636
112,000 369,500 481,500
35.44%
$105,560 $249,550 42.30% 57.70%
6,491
143,990 150,481
101,000 342,000 443,000
33.97%
6. Equity
Total Average Stock
Preferred Redeemable on Dividends -Items ng Nonrecurri Before Income Net Equity on Return =
2004 2003 2002
Net earnings
Average total equity
$171,115 $406,000 $163,497 $369,500
$143,990 $342,000
7. Assets
Fixed Net Average Sales
Net Assets Fixed to Sales
=
2004 2003 2002
$1,002,100 $ 302,500
= 3.31
$980,500 $281,000
= 3.49
$900,000 $173,000
= 5.20
b. The ratios computed indicate a very profitable firm. Most ratios indicate A very slight reduction in profitability in 2003.
Sales to fixed assets has declined materially, but this is the only ratio for which the trend appears to be negative.
PROBLEM 8-5 a. 1. Sales
Net Items
ng Nonrecurri and Earnings of Share Minority Before Income Net Margin Profit Net =
2004 2003 2002
$20,070-$8,028 $297,580
= 4.05%
$16,660-$6,830 $256,360
= 3.83%
$15,380-$6,229 $242,150
= 3.78%
2. Assets
Total Average Items
ng Nonrecurri and Earnings of Share Minority Before Income Net Assets on Return =
2004 2003
2002 $20,070-$8,028
= 8.26%
$16,660-$6,830
= 7.18%
$15,380-$6,229
= 6.73%
3. Assets
Total Average Sales
Net Turnover Asset Total
=
2004 2003 2002
$297,580 $145,760
= 2.04 times per year
$256,360 $137,000
= 1.87 times per year
$242,150 $136,000
= 1.78 times per year
4. DuPont Analysis
Return on Assets = Operating Income Margin x Total Asset Turnover 2004: 8.26% 2003: 7.16%* 2002: 6.73%
= = = 4.05% 3.83% 3.78% x x x
2.04 times 1.87 times 1.78 times
*Rounding difference from the 7.18% computed in 2.
5. Sales
Net Income
Operating Margin Income Operating =
2004 2003 2002
$ 26,380 $297,580
= 8.86%
$ 22,860 $256,360
= 8.92%
$ 20,180 $242,150
= 8.33%
6. Assets
Operating Average Income
Operating Assets Operating on Return
=
2004
2003
2002 $26,380_____ $89,800+$45,850
= 19.45%
$ 22,860____ $84,500+$40,300
= 28.32% $ 20,180____ $83,100+$39,800
= 16.42%
7. Assets
Operating Average Sales
Net Turnover Asset Operating
=
2004 2003 2002
$45,850$89,800$297,580
+
= 2.19 times per year
$40,300$84,500$256,360
+
= 2.05 times per year
$39,800$83,100$242,150
+
= 1.97 times per year
8. DuPont Analysis with Operating Ratios
Return on Assets = Operating Income Margin x Total Asset Turnover 2004: 19.40%* 2003: 18.29%* 2002: 16.41%*
= = = 8.86% 8.92% 8.33% x x x
2.19 times 2.05 times 1.97 times
*Rounding difference from the 19.45%, 18.32%, and 16.42%
computed in 6.
9.
Sales
Net Profit
Gross Margin Profit Gross =
2004 2003 2002
$ 91,580 $297,580
= 30.77%
$ 80,060 $256,360
= 31.23%
$ 76,180 $242,150
= 31.46%
b. Net profit margin and total asset turnover both improved. This resulted in a substantial improvement to return on assets.
Operating income margin declined slightly in 2003 after a substantial improvement in 2002. Operating asset turnover improved each year. The result of the improvement in operating income margin and operating asset turnover was a substantial improvement in return on operating assets. Gross profit margin declined slightly each year.
Overall profitability improved substantially over the three-year period.
PROBLEM 8-6 a. 1.
Assets
Total Average Items
ng Nonrecurri and Earnings of Share Minority Before Income Net Assets on Return =
2004 2003 2002 (A) (B)
$ 2,100,000 7,000,000 100,000 10,000,000 $19,700,000
$ 1,950,000 6,200,000 100,000 9,000,000 $17,600,000
$ 1,700,000 5,800,000 100,000 8,300,000 $16,400,000
2. Equity)
s Liabilitie Term -(Long Average Rate)]
-Tax -1Expense)x( [(Interest Items ng Nonrecurri and Earnings of Share Minority Before Income Net Investment on Return ++=
Estimated tax rate:
2004
2003
2002
(1) Provision for income taxes (2) Income before tax
tax rate = (1) divided by (2)
1 – tax rate
(3) Interest expense x (1-tax rate) $80,000 x 58.33% $600,000 x 57.35% $550,000 x 61.82%
(4) Net income
(3) plus (4) (A)
Long-term debt Preferred stock Common equity
(B)
(A) divided by (B)
$ 1,500,000 3,600,000
41.67%
58.33%
$ 466,640
$ 2,100,000
$ 2,566,640
$ 7,000,000
100,000 10,000,000
15.01%
$ 1,450,000 3,400,000
57.35%
$ 344,100
$ 1,950,000
$ 2,294,100
$ 6,200,000
100,000 9,000,000
14.99%
$ 1,050,000 2,750,000
38.18%
61.82%
$ 340,000
$ 1,700,000
$ 2,040,010
$ 5,800,000
100,000 8,300,000
14.37%
3.
Equity
Total Average Stock
Preferred Redeemable on Dividends Items
ng Nonrecurri Before Income Net Equity Total on Return = 2004 2003 2002 0$10,000,00$100,000$2,100,000+
= 20.79%
$9,000,000$100,000$1,950,000+
= 21.43% $8,300,000
$100,000$1,700,000
++
= 29.24%
4.
Common Average Dividends
Preferred Items ng Nonrecurri Before Income Net Equity Common on Return ==
2004 2003
2002
$10,000,00$14,000
-$2,100,000
= 20.86%
$9,000,000
$14,000
-$1,950,000
= 21.51%
$8,300,000
$14,000
-$1,700,000
= 20.31%
b. Return on assets improved in 2003 and then declined in 2004.
Return on investment improved each year. Return on total equity improved and then declined. Return on common equity improved and then declined. In general, profitability has improved in 2003 over 2002
but was down slightly in 2004.
c. The use of long-term debt and preferred stock both
benefited profitability. Return on common equity is slightly more than return on
total equity, indicating a benefit from preferred stock. Return on total equity is substantially higher than return
on investment, indicating a benefit from long-term debt.
PROBLEM 8-8 a. 1.
Sales
Net Items
ng Nonrecurri and Earnings of Share
Minority Before Income Net Margin Profit Net = 2004:
7.42%$980,000$72,700
=
2003:
6.76%$960,000
$64,900
=
2002:
6.15%$940,000
$57,800
=
2001:
5.69%$900,000
$51,200
=
2000:
5.10%$880,000
$44,900
=
2. Assets
Total Average Sales
Net Turnover Asset Total =
2004:
year per times 1.14$86,000)/2
($859,000$980,000
2003:
year per times 1.112
$870,000)/($861,000$960,000
=+
2002:
year per times 1.082
$867,000)/($870,000$940,000
=+
2001:
year per times 1.042
$863,000)/($867,000$900,000
=+
2000: Cannot compute average assets. 2004:
year per times 1.14$859,000 $980,000
=
2003:
year per times 1.11$861,000 $960,000
=
2002:
year per times 1.08$870,000 $940,000
=
2001:
year per times 1.04$867,000 $900,000
=
year per times 1.02$863,000
$880,000
=
3. Assets Total Average Items
ng Nonrecurri and Earnings of Share Minority Before Income Net Assets on Return =
Average Balance Sheet Figures
2004:
8.45%2$861,000)/($859,000$72,700
=+
2003:
7.50%2$870,000)/($861,000$64,900
=+
2002:
6.66%2$867,000)/($870,000$57,800
=+
2001:
5.92%2
$863,000)/($867,000$51,200
=+
2000: Cannot compute average assets.
2004:
8.46%$859,000
$72,700
=
2003:
7.54%$861,000
$64,900
=
6.64%$870,000
$57,800
=
2001:
5.91%$867,000
$51,200
=
2000:
5.20%$863,000
$44,900
=
4. Turnover Asset T otal x
Margin Profit Net Assets on Return DuPont =
Average Balance Sheet Figures 2004: 7.42% x 1.14 times = 8.46% 2003: 6.76% x 1.11 times = 7.50% 2002: 6.15% x 1.08 times = 6.64% 2001: 5.69% x 1.04 times = 5.92% 2002:
Cannot compute average assets
Year-End Balance Sheet Figures 2004: 7.42% x 1.14 times = 8.46% 2003: 6.76% x 1.11 times = 7.50% 2002: 6.15% x 1.08 times = 6.64% 2001: 5.69% x 1.04 times = 5.92%
2000:
5.10% x 1.02 times = 5.20%
5. Sales
Net Income
Operating Margin Income Operating =
2004:
11.73%
$980,000$240,000
-$355,000= 2003:
$960,000$239,000
-$344,000= 2002:
10.11%
$940,000$238,000
-$333,000= 2001:
9.00%$900,000$239,000
-$320,000=
2000:
8.98%$880,000
$235,000
-$314,000=
6. Assets
Operating Average Sales
Net Turnover Asset Operating =
2004: year per times 1.26$85,000)/2
-$861,000$80,000-($859,000$980,000
=+
2003: year per times 1.23$90,000)/2
-$870,000$85,000-($861,000$960,000
=+
2002: year per times 1.21$95,000)/2
-$867,000$90,000-($870,000$940,000
=+
2001:
year per times 1.172
$100,000)/-$863,000$95,000-($870,000$900,000 =+
2000: Average assets cannot be computed. 2004:
year per times 1.26$80,000
-$859,000$980,000
=
2003:
year per times 1.24$85,000
-$861,000$960,000
=
2002:
year per times 1.21$90,000
-$870,000$940,000
=
2001:
year per times 1.17$95,000
-$867,000$900,000
=
2000:
year per times 1.15$100,000
-$863,000$880,000
=
7. Assets
Operating Average Income Operating Assets Operating on Return = 2004:
14.79%$85,000)/2
-$861,000$80,000-($859,000$240,000 -$355,000=+
2003:
13.50%$90,000)/2
-$870,000$85,000-($861,000$239,000 -$344,000=+
2002:
12.24%$95,000)/2
-$867,000$90,000-($870,000$238,000
-$333,000=+
2001:
10.55%$100,000/2
-$863,000$95,000-($867,000$239,000
-$320,000=+
2000: Average Assets cannot be computed. 2004:
14.76%
$80,000
-$859,000$240,000
-$355,000= 2003:
13.53%
$80,000
-$861,000$239,000
-$344,000= 2002:
12.18%
$90,000
-$870,000$238,000
-$333,000= 2001:
10.49%$95,000
-$867,000$239,000
-$320,000=
2000:
10.35%$100,000
-$863,000$235,000
-$314,000=
8. DuPont Return on Operating Assets =
Operating Income Margin x Operating Asset Turnover Average Balance Sheet Figures 2004: 11.73% x 1.26 = 14.78% 2003: 10.94% x 1.23 = 13.46% 2002: 10.11% x 1.21 = 12.23% 2001: 9.00% x 1.17 = 10.53%
2000:
Average assets cannot be computed.
Year-End Balance Sheet Figures 2004: 11.73% x 1.26 = 14.78% 2003: 10.94% x 1.24 = 13.57% 2002: 10.11% x 1.21 = 12.23% 2001: 9.00% x 1.17 = 10.53%
2000:
8.98% x 1.15 = 10.33%
9. Assets
Fixed Net Average Sales
Net Assets Fixed to Sales =
2004:
1.982$491,000)/($500,000$980,000
=+
2003:
1.972$485,000)/($491,000$960,000
=+
2002:
1.952$479,000)/($485,000$940,000
=+
2001:
1.902
$479,000)/($479,000$900,000
=+
2000: Average net fixed assets cannot be computed. Year-End Balance Sheet Figures
2004:
1.96$500,000 $980,000
=
2003:
1.96$491,000 $960,000
=
2002:
1.94$485,000 $940,000
=
2001:
1.88$479,000 $900,000
=
2000:
1.87$470,000 $880,000
=。