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    SCALP Handout 040

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    Eren Cuesta
    Grumpy Cat Company provided its comparative statements of financial position for 2020 and 2019 and statement of comprehensive income for 2020 to a financial analyst. The analyst was hired to compute and interpret various financial ratios to analyze Grumpy Cat's operations, including current ratio, acid test ratio, cash ratio, debt ratio, debt-to-equity ratio, times interest earned ratio, asset turnover ratio, inventory turnover ratio, accounts receivable turnover ratio, gross profit ratio, return on assets, and return on equity.

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    SCALP Handout 040

    Uploaded by

    Eren Cuesta
    98 views2 pages
    Grumpy Cat Company provided its comparative statements of financial position for 2020 and 2019 and statement of comprehensive income for 2020 to a financial analyst. The analyst was hired to compute and interpret various financial ratios to analyze Grumpy Cat's operations, including current ratio, acid test ratio, cash ratio, debt ratio, debt-to-equity ratio, times interest earned ratio, asset turnover ratio, inventory turnover ratio, accounts receivable turnover ratio, gross profit ratio, return on assets, and return on equity.

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    SCALP Handout 040 (1)

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    Grumpy Cat Company provided its comparative statements of financial position for 2020 and 2019 and statement of comprehensive income for 2020 to a financial analyst. The analyst was hired to compute and interpret various financial ratios to analyze Grumpy Cat's operations, including current ratio, acid test ratio, cash ratio, debt ratio, debt-to-equity ratio, times interest earned ratio, asset turnover ratio, inventory turnover ratio, accounts receivable turnover ratio, gross profit ratio, return on assets, and return on equity.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    98 views2 pages

    SCALP Handout 040

    Uploaded by

    Eren Cuesta
    Grumpy Cat Company provided its comparative statements of financial position for 2020 and 2019 and statement of comprehensive income for 2020 to a financial analyst. The analyst was hired to compute and interpret various financial ratios to analyze Grumpy Cat's operations, including current ratio, acid test ratio, cash ratio, debt ratio, debt-to-equity ratio, times interest earned ratio, asset turnover ratio, inventory turnover ratio, accounts receivable turnover ratio, gross profit ratio, return on assets, and return on equity.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 2

    This is

    Handout 040 Analysis of Financial Statements through Ratios

    Please use this handout for


    Lesson 040 Financial Statements Analysis 2 -
    Ratio Analysis and Interpretation

    Grumpy Cat Company decided to undergo financial analysis of their operations for 2020 and 2019. You
    are being hired as the financial analyst who will help Grumpy Cat understand each component better. The
    following information was provided to you:

    Grumpy Cat Company


    Comparative Statements of Financial Position
    December 31, 2020 and 2019

    2020 2019
    ASSETS
    Current Assets
    Cash and cash equivalents P1,896,337 P1,456,997
    Trade and other receivables 653,974 885,697
    Marketable equity securities 468,220 450,000
    Merchandise inventory 677,520 756,442
    Other current assets 8,650 40,619
    Total current assets 3,704,701 3,589,755

    Noncurrent assets
    Property, plant and equipment, net 4,302,981 4,506,669
    Investment in associate 530,978 389,664
    Investment property, net 3,597,556 3,699,754
    Other noncurrent assets 220,000 385,600
    Total noncurrent assets 8,651,515 8,981,687

    TOTAL ASSETS P12,356,216 P12,571,442

    LIABILITIES AND EQUITY


    Current liabilities
    Trade and other payables P 658,000 P 556,000
    Income tax payable 500,000 458,800
    Current portion of bonds payable 1,000,000 1,320,000
    Other current liabilities 125,000 88,200
    Total current liabilities 2,283,000 2,423,000

    Noncurrent liabilities
    Bonds payable 4,283,694 5,663,997
    Other noncurrent liabilities 80,000 88,000
    Total noncurrent liabilities 4,363,694 5,751,997

    Shareholders' Equity
    Ordinary share capital 2,000,000 2,000,000
    Ordinary share premium 500,000 500,000
    Retained earnings 2,209,522 1,896,445
    Retained earnings – bonds 1,000,000 -
    Total shareholders’ equity 5,709,522 4,396,445

    TOTAL LIABILITIES AND EQUITY P12,356,216 P12,571,442

    Page 1 of 2
    This is
    Handout 040 Analysis of Financial Statements through Ratios

    Please use this handout for


    Lesson 040 Financial Statements Analysis 2 -
    Ratio Analysis and Interpretation

    Grumpy Cat Company


    Statement of Comprehensive Income
    For the year ended December 31, 2020

    2020
    Net Sales P4,000,000
    Less: Cost of goods sold 1,630,880
    Gross profit 2,369,120
    Less: Selling expenses 224,891
    Administrative expenses 188,845
    Other expenses 67,000
    Operating income 1,888,384
    Less: interest expense 12,560
    Net income before tax 1,875,824
    Income tax expense 562,747
    Net income P1,313,077

    Compute for the following ratios and interpret:


    1. Current Ratio
    2. Acid Test Ratio
    3. Cash Ratio
    4. Debt Ratio
    5. Debt to Equity Ratio
    6. Times Interest Earned Ratio
    7. Asset Turnover Ratio
    8. Inventory Turnover Ratio (and days sales in inventory)
    9. Accounts Receivable Turnover Ratio (and days in receivables)
    10. Gross Profit Ratio
    11. Return on Assets
    12. Return on Equity

    Page 2 of 2

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