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Activity 1

The document provides financial ratios and information for MAS, Inc. for fiscal year 2022. It asks the reader to use the ratios and sales figure of P40,000,000 to calculate missing values like gross profit, cost of goods sold, operating profit, etc. It also provides additional financial data for other companies and questions related to analyzing the impact on ratios of paying accounts payable and calculating working capital, current and acid test ratios.

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Cristine Joy Benitez
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78 views

Activity 1

The document provides financial ratios and information for MAS, Inc. for fiscal year 2022. It asks the reader to use the ratios and sales figure of P40,000,000 to calculate missing values like gross profit, cost of goods sold, operating profit, etc. It also provides additional financial data for other companies and questions related to analyzing the impact on ratios of paying accounts payable and calculating working capital, current and acid test ratios.

Uploaded by

Cristine Joy Benitez
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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MAS 3: Financial Management

TOPIC: Financial Analysis

Given the following: MAS, Inc., McDougal Printing, Inc.


had sales totaling P40,000,000
Year Ended December 31, 2022
in fiscal year 2022. Some ratios
for the company are listed below.
Use this information to determine Sales 40,000,000.00
the dollar values of various income
Gross Profit Magin 80%
statement and balance sheet accounts
as requested,: Operating Profit Mrgin 35%
• Use 365 days Net profit Margin 8%
Return on total assets 16%
Return on common equity 20%
Total Asset Turnov er 2%
Calculate values for the following: Av eraga Collection Period 62.2 days
1. Gross profits
a.10,000,000 b. 32,000,000 c. 25,000,000 d. 30,000,000
2. Cost of goods sold
a.30,000,000 b.8,000,0000 c.15,000,000 d.10,000,000
3. Operating profits
a. 10,000,000 b. 5,000,000 c. 18,000,000 d. 14,000,0000
4.Operating expenses
a.18,000,000 b 7,000,0000. c.5,000,000 d. 20,000,000
5. Earnings available for common stockholders
a.1,500,000 b. 4,000,000 c. 2,800,000 d.3,200,000
6. Total assets
a. 20,000,000 b. 9,375,000 c. 25,000,000 d.17,500,000
7. Total common stock equity
a. 16,000,000 b. 14,000,000 c. 20,000,000 d. 7,500,000
8. Accounts receivable
a. 6,916,623.58 b. 6,814,310.05 c. 6,814,510.05 d. 5,822,416.30

9.The following financial data have taken from the records of Stabilo Company:
Accounts Receiv able 200,000.00
Accounts Payable 80,000.00
Bonds Payable, due in 10 years 500,000.00
Cash 100,000.00
Interest payable, due in three months 25,000.00
Inv entory 440,000.00
Land 800,000.00
Notes payable, due in six months 250,000.00

What will happen to the ratios below if Stabilo Company uses cash to pay 50 percent of its
accounts payable?
CURRENT RATIO ACID-TEST RATIO
a. Increase Increase
b. Decrease Decrease
c. Increase Decrease
d. Decrease Increase

Question 10 – 12 are based on the data taken from the balance sheet of Canon Company at
the end of the current year:

Accounts Payable 145,000.00


Accounts Receiv able 110,000.00
Accrued Liabilities 4,000.00
Cash 80,000.00
Income tax payable 10,000.00
Inv entory 140,000.00
Marketable Securities 250,000.00
Notes payable, due in six months 85,000.00
Prepaid Expenses 15,000.00
10. The amount of working capital for the company is:
a. 351,000 c. 211,000
c. 361,000 d. 336,000
11. The company’s current ratio is:
a. 2.67: 1 c. 2,02:1
b. 2.44:1 d. 1.95: 1
12. The company’s acid-test ratio is:
a. 1.80: 1 c. 2.02: 1
b. 2.40: 1 d. 1.76:1
13. In the DuPont system, the return on total assets (asset) is equal to

a. (return on equity) X (financial leverage multiplier).


b. (return on equity) X (total asset turnover).
c. (net profit margin) X (fixed asset turnover).
d. (net profit margin) X (total asset turnover).

Question 14 – 15 At the end of 2025, the Long-Life Light Bulb Company announced it had
produced a gross profit of 1 million. The company has also established that over the course of
this year it has incurred 345,000 in operating expenses and 125,000 in interest expenses. The
company is subject to a 30 percent tax rate and has declared 57,000 total preferred stock
dividends.

14. How much is the earnings available for common stockholders?


a. 530,000 b. 473,000 c. 331,100 d. 314,000
15. Compute the increased retained earnings for 2005 if the company were to declare a 4.25
common stock dividend. The company has 15,000 shares of common stock outstanding.
a. 250,250 b.466,250 c. 409,250 d. 267,350

16. The _________ provides a financial summary of the firm’s operating results during a specified
period.
a. income statement
b. balance sheet
c. statement of cash flows
d. statement of retained earnings

17. Operating profits are defined as


a. sales revenue minus cost of goods sold.
b. earnings before interest and taxes.
c. earnings before depreciation and taxes.
d. earnings after tax.

18. Crown Clothing Store had a balance in the Accounts Receivable account of P390,000 at the
beginning of the year and a balance of P410,000 at the end of the year. The net credit sales
during the year amounted to P4,000,000. Using 360-day year, what is the average collection
period of the receivables?
a. 30 days
b. 73 days
c. 36 days
d.65 days

19. During 2010, Central Company purchased P960,000 of inventory. The cost goods sold for 2010
was P900,000, and the ending inventory at December 2010 was P180,000. What was the
inventory turnover for 2010?
a. 6.4
b. 6.0
c. 5.3
d. 5.0
20. In which of the following cases may a percentage change be computed?
a. The trend of the amounts is decreasing but all amounts are positive
b. There is no amount in the base year
c. There is a negative amount in the base year and a negative amount in the
subsequent year.
d. There is a negative amount in the base year and a positive amount in the subsequent
year.
JVGV - CPA

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