ACCT202 CTU Ratios Calculation of ALMARAEI and ALSAFI, Inc.

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Business Finance

Colorado Technical University

Description

- Presentation “Powerpoint“

- Report:

Word count: 750 Max

Double space

Required:

In a report format that must include

 Introduction

 Body

 Conclusion

 References

 750 words

 At least 2 academic references (10 Points)

(1) Current ratio

(2) Accounts receivable turnover

(3) Average collection period (in days)

(4) Inventory turnover

(5) Days in inventory

(6) Current cash debt coverage

(7) Profit margin

(8) Asset turnover

(9) Return on assets

(10) Return on common stockholders’ equity

(11) Debt to assets ratio

(12) Times interest earned

(13) Cash debt coverage

(14) Free cash flow

(b) Compare and comment on the liquidity, solvency and profitability ratios of the two companies (12 points).

(c) Presentation must be given in class "PowerPoint 10 Slides" 10 minutes at least in total (10 points).

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Kingdom of Saudi Arabia Ministry of Education Alasala Colleges College of Business College of Business Finance Department ACCT202 Intro to Managerial Accounting Group Project 2nd Semester 2018-2019 15 Marks 1 The Project work requires you to: 12345- Constitute a group of at least 5 students but no more than 6 students. Conduct a simple information search using the internet. Present your findings and your answers within the specified word count. You should use a Microsoft Office Word and Arial Font of 12 points, double space. You should read and follow the instructions below carefully. Each part of the process will carry marks for the assignment. 6- Each group should present their findings in PowerPoint at least 7 minutes. 7- The Project work must be submitted during Week 10 from 10-03-2019 to 14-03-2019. 8- Each group must submit hard copy of the  Report  Presentation Total Marks The Project worth 15 marks divided into 60 points. General instructions for students: Plagiarism: It’s imperative that you write your answers using your own words. Plagiarism will be penalized depending on its severity and according to ALASALA plagiarism policy. Word count: At least 750 words in MS word format that are directly related to your answer. Your answers are expected to be within the specified word count. A 10% deviation from word count limit is acceptable. Not adhering to specified word count could result in the deduction of up to 2 marks of your total project work mark. Referencing: You are expected to use the Harvard referencing style for in-text referencing and list of reference at the end. Failing to do so could result in the deduction of up to 2 marks of your total project work mark. E-library: You are expected to use E-library sources to support your answers. A minimum of 2 academic sources is required. Failing to do so could result in the deduction of up to 2marks of your total Project work mark. Format and Presentation: In your answer, you should explain each point or inquire separately. 2 ALMARAEI and ALSAFI financial statements for 2017 are presented below: ALMARAEI ALSAFI, Inc. Income Statement Data for Year Net sales Cost of goods sold Selling and administrative expenses Interest expense Other income (expense) Income tax expense Net income $65,357 45,583 15,101 707 (94) 1,384 $ 2,488 $408,214 304,657 79,607 2,065 (411) 7,139 $ 14,335 Balance Sheet Data (End of Year) Current assets Noncurrent assets Total assets Current liabilities Long-term debt Total stockholders’ equity Total liabilities and stockholders’ equity $18,424 26,109 $44,533 $11,327 17,859 15,347 $44,533 $48,331 122,375 $170,706 $55,561 44,089 71,056 $170,706 Beginning-of-Year Balances Total assets Total stockholders’ equity Current liabilities Total liabilities Average net accounts receivable Average inventory Net cash provided by operating activities Capital expenditures Dividends 3 $44,106 13,712 10,512 30,394 $163,429 65,682 54,390 97,747 Other Data $7,525 6,942 5,881 1,729 496 $4,025 33,836 26,249 12,184 4,217 Required: In a report format that must include       Introduction Body Conclusion References 750 words At least 2 academic references (10 Points) Answer the following: (a) For each company, compute the following ratios (28 points). (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14) Current ratio Accounts receivable turnover Average collection period (in days) Inventory turnover Days in inventory Current cash debt coverage Profit margin Asset turnover Return on assets Return on common stockholders’ equity Debt to assets ratio Times interest earned Cash debt coverage Free cash flow (b) Compare and comment on the liquidity, solvency and profitability ratios of the two companies (12 points). (c) Presentation must be given in class "PowerPoint 10 Slides" 10 minutes at least in total (10 points). 4
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Running head: RATIOS CALCULATION OF ALMARAEI AND ALSAFI, INC.

Ratios Calculation of ALMARAEI and ALSAFI, Inc.
Course’s Name
Student’s Name
Professor’s Name
Institution
Due Date

1

Running head: RATIOS CALCULATION OF ALMARAEI AND ALSAFI, INC.

2

Ratios Calculation of ALMARAEI and ALSAFI, Inc.
Introduction
ALMARAEI is a Saudi-based combination, recorded on the Tadawul stock trade.
It has some expertise in drink and food distribution and production. The primary
workplaces of ALMARAEI are situated in Saudi Arabia. On the other hand, ALSAFI Inc.
is a French global enterprise for food-products founded in Spain. Indeed, the company
has been supplying clients over the area with heavenly crisp dairy goodness. Every
product offered by ALSAFI Inc. is from pure and nutritious cow's milk, which contain
the main sources of vitamins and calcium.
Body
(a) Based on the given financial statements for 2017 of the two companies, we
can calculate all of the given ratios for ALMARAEI and ALSAFI, Inc.
(1) The current ratio of ALMARAEI is computed by:

Current assets
$18, 424
=
= 0.706
Current liabilities $26,109

Current ratio =

Similarly, the current ratio of ALSAFI, Inc. is computed by:

Current ratio =

Current assets
$48,331
=
= 0.870
Current liabilities $55,561

(2) The accounts receivable turnover of ALMARAEI is computed by:

Accounts receivable turnover =

Net sales
$65,357
=
= 8.685
Average net accounts receivable $7,525

Similarly, the accounts receivable turnover of ALSAFI, Inc. is computed by:

Accounts receivable turnover =

Net sales
$408,214
=
= 101.420
Average net accounts receivable
$4,025

(3) The average collection period (in days) of ALMARAEI is computed by:

Running head: RATIOS CALCULATION OF ALMARAEI AND ALSAFI, INC.

Average net accounts receivable
Net sales / 365
$7,525
 Average collection period =
$65,357 / 365
 Average collection period = 42.02 days
Average collection period =

Similarly, the average collection period (in days) of ALSAFI, Inc. is computed by:

Average net accounts receivable
Net sales / 365
$4,025
 Average collection period =
$408,214 / 365
 Average collection period = 3.60 days
Average collection period =

(4) The inventory turnover of ALMARAEI is computed by:

Cost of goods sold
Average inventory
$45,583
 Inventory turnover =
$6,942
 Inventory turnover = 6.57
Inventory turnover =

The inventory turnover of ALSAFI, Inc. is computed by:

Cost of goods sold
Average inventory
$304,657
 Inventory turnover =
$33,836
 Inventory turnover = 9.00
Inventory turnover =

(5) The days in the inventory of ALMARAEI is computed by:

Average inventory
Cost of good...

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