If your library has a common stock investment advisory service such as Moody’s Handbook of Common Stocks or online access to an investment advisory service such as Value Line Research Center: Historical Reports, use one of those sources to locate a report about a company you have heard about or in which you have an interest. Alternatively, visit a brokerage firm office and ask for a report from one of the above sources or a report prepared by the brokerage firm’s research division. Review the report and notice the analytical data that it contains. What other data besides those in the report would you like to obtain? Why do you want these other data? How would you get them?

If the trend of the current ratio is increasing while the trend of the acid-test ratio is decreasing over a period of time, this could be a warning that the firm is a. carrying excess inventories. b. depleting its inventories. c. having trouble collecting its receivables. d. purchasing too much property, plant, and equipment.

The following information was available for the year ended December 31, 2016:

$$\begin{array}{lr} \text{Sales}&\$ 400,000\\ \text{Net income}& 60,000\\ \text{Average total assets }&1,000,000\\ \text{Average total stockholders' equity }&600,000\\ \text{Divends per share }&2.40\\ \text{Earnings per share.}& 6.00\\ \text{Market price per share at year-end}& 96.00\\ \end{array}$$

a. Calculate margin, turnover, and ROI for the year ended December 31,2016.
b. Calculate ROE for the year ended December 31,2016 .
c. Calculate the price/earnings ratio for 2016 .
d. Calculate the dividend payout ratio for 2016 .
e. Calculate the dividend yield for 2016 .

The following information was available for the year ended December 31, 2016:

$$\begin{array}{lr} \text{Net sales}&\$365,000\\ \text{Cost of goods sold}&292,000\\ \text{Average accounts recevable for the year}&14,600\\ \text{Accounts receivable at year-end}&16,000\\ \text{Average imentory for the year}&73,000\\ \text{Inventory at year-end}&78,400\\ \end{array}$$

a. Calculate the inventory turnover for 2016 .
b. Calculate the number of days' sales in inventory for 2016 , using year-end inventories.
c. Calculate the accounts receivable turnover for 2016 .
d. Calculate the number of days' sales in accounts receivable for 2016 , using year-end accounts receivable.

The following information was available for the year ended December 31, 2013:

Required: c. Calculate the times interest earned for the year ended December 31, 2013.

(Note: Please refer to Case 4.30 on pages 132-133 for the financial statement data needed for the analysis of this case. You should also review the solution to Case 4.30. provided by your instructor, before attempting to complete this case.)\

a. Case 4.30 presents the 2016 income statement and balance sheet for Gerrard Construction Co. What other financial statements are required? What information would these statements communicate that could not be determined by reviewing only the income statement and balance sheet?
b. Briefly describe the note disclosures that should be provided by Gerrard Construction Co., and explain why note disclosures are considered an integral part of the financial statements.
c. Assume that the balance of "Accounts Receivable, net" at December 31, 2015, was $\$ 16,400$. Calculate the following activity measures for Gerrard Construction Co. for the year ended December 31, 2016:\

1. Accounts receivable turnover.
2. Number of days' sales in accounts receivable. d. Calculate the following financial leverage measures for Gerrard Construction Co. at December 31, 2016:\
3. Debt ratio.
4. Debt/equity ratio. e. Gerrard Construction Co. wishes to lease some new earthmoving equipment from Caterpillar on a long-term basis. What impact (increase, decrease, or no effect) would a capital lease of $8 million have on the company's debt ratio and debt/equity ratio? (Note that these items were computed in part d and do not need to be recomputed for this requirement.)
   f. Review the answer to Case 4.30 part i at this time. Assume that Gerrard Construction Co, had 4,800,000 shares of$1 par value common stock outstanding throughout 2016, and that the market price per share of common stock at December 31,2016 , was $18.75. Calculate the following profitability measures for the year ended December 31, 2016:\
5. Earnings per share of common stock.
6. Price/earnings ratio.
7. Dividend yield.
8. Dividend payout ratio.

The following information was available for the year ended December 31, 2013:

Required: b. Calculate the debt/equity ratio at December 31, 2013.

Many financial analysts substitute one amount for another in making ratio analysis comparisons in order to better achieve intercompany or companyto-industry data comparability. Which of the substitutions described here would not achieve better data comparability (for the ratio indicated) under any situation? a. Cost of goods sold for sales—in the numerator of the inventory turnover ratio. b. Cost of plant and equipment for net book value—in the numerator of the plant and equipment turnover ratio. c. Expected future earnings per share for current earnings per share—in the denominator of the price/earnings ratio. d. Average net assets for average total assets—in the denominator of the return on investment ratio.

Partially completed financial statements for Whittaker, Inc., follow:

$$\begin{array}{lr} \text{Sales}&\$?\\ \text{Cost of goods sold}&?\\ \text{Gross profit}&\$?\\ \text{Operating expenses}&?\\ \text{Income from operations}&\$?\\ \text{Interest expense}&?\\ \text{Income before taxes}&\$?\\ \text{Income taxes (20\\\%)}&?\\ \text{Net income}&\$?\\ \end{array}$$

a. Complete the income statement and balance sheet for Whittaker, Inc. Show how each amount was determined.
b. After completing part a, use your answers to recompute each of the financial ratios provided as additional information.

The following information was available for the year ended December 31, 2013:

Required: a. Calculate the debt ratio at December 31, 2013

The annual reports of the Coca-Cola Co. and PepsiCo. Inc., indicate the following for the year ended December 31, 2014 (amounts in millions):

Net revenues& Net income& Total assets, Jaruary 1, 2014& Total liabities, January 1,2014& Total lablities, December 31, 2014& Total stockhoiders" equity, December 31, 2014&

$$\begin{aligned} &\begin{array}{lr} \text{Net revenues}&\$ 45,998 & \$ 66,683 \\ \text{Net income}&7,124 & 6,558 \\ \text{Total assets, Jaruary 1, 2014}&90,055 & 77,478 \\ \text{Total liabities, January 1,2014}&56,615 & 53,089 \\ \text{Total lablities, December 31, 2014}&61,462 & 52,961 \\ \text{Total stockhoiders" equity, December 31, 2014}&30,561 & 17,548 \\ \hline \end{array} \end{aligned}$$

a. Calculate ROI and ROE for each company for 2014. (Hint: You will need to calculate some of the numbers used in the denominator of these ratios.)
b. Based on the results of your ROI and ROE analysis in part a, do you believe that either firm uses financial leverage more effectively than the other? Explain your answer. (Hint: Compare the percentage differences between ROI and ROE for each firm. Is there a significant difference that would suggest that one firm uses leverage more effectively than the other?)
c. Calculate the debt ratio and debt/equity ratio for each firm at the end of 2014 .
d. Compare the results of your analysis in part c to your expectations concerning the relative use of financial leverage in part b. Do the debt and debt/equity ratios calculated in part $\mathbf{c}$ make sense relative to your expectations? Explain your answer.

Which basis of ratio evaluation would you expect to produce the most meaningful comparisons? a. Within-company comparisons as of a given date. b. Company-to-industry comparisons as of a given date. c. Within-company trends over a period of time. d. Company-to-industry comparisons over a period of time.

The following information was available for the year ended December 31, 2013:

Required: e. Calculate the dividend yield for 2013.

The following information was available for the year ended December 31, 2013:

Required: d. Calculate the dividend payout ratio for 2013.