END OF CHAPTER PROBLEMS
4.1 The Abercrombie Supply Company reported the following information for 2011. Prepare a common size income statement for the year ended June 30, 2011. Abercrombie Supply Company Income Statement for the Fiscal Year Ended June 30, 2011 (in $ thousands)
Solution: The common-size income statement for Abercrombie Supply Company should look like follow:
4.2 Prepare a common-size balance sheet from the following information for Abercrombie Supply Company. Abercrombie Supply Company Balance Sheet as of June 30, 2011 (in $ thousands)
Solution: The common-size balance sheet statement for Abercrombie Supply Company should look like follow:
4.3 Using the 2011 data above for Abercrombie Supply Company calculate the following liquidity ratios: a. Current Ratio b. Quick Ratio Solution:
4.4 Refer above to the balance sheet and income statement for Abercrombie Supply Company for the year ended June 30, 2011. Calculate the following ratios: a. Inventory turnover ratio b. Days’ sales outstanding c. Total asset turnover d. Fixed asset turnover e. Total debt ratio f. Debt-to-equity ratio g. Times interest earned ratio h. Cash coverage ratio.
Solution: