Q3TI Monroe Corp. reported the follow... [FREE SOLUTION]

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Chapter 15: Q3TI (page 812)

Monroe Corp. reported the following amounts on its balance sheet at December 31, 2018 and 2017:
2018, 2017
Cash and Receivables $ 35,000 $ 40,000
Merchandise Inventory 20,000 15,000
Property, Plant, and Equipment, Net 80,000 60,000
Total Assets $ 135,000 $ 115,000
Prepare a vertical analysis of Monroe Corp. for 2018 and 2017.

Short Answer

Expert verified

Answer

Vertical analysis of Monroe Corp is given below indicating that value of current assets increase in balance sheet.

Step by step solution

Calculations

Balance Sheet(partial) Dec 31, 2018 and 2017
	2018($)	Percent of Total	2017($)	Percent of Total
Cash & receivables	35,000	35,000	35,000	35,000
Merchandise Inventory	20,000	20,000	15,000	15,000
Property plant and Equipment	80,000	59.26%	60,000	52.17%
Total Assets	135,000	100%	115,000	100%

Workings

Balance Sheet(partial)

Dec 31, 2018 and 2017

2018($)

Percent of Total

2017($)

Percent of Total35,000

Cash &

receivables

35,000

(35,000/135,000)*100

40,000

(40,000/115,000)*100

Merchandise Inventory

Total Assets

(20,000/135,000)*100

15,000

(15,000/115,000)*100

Property plant and Equipment

80,000

(80,000/135,000)*100

60,000

(60,000/115,000)*100

Total Assets

135,000

100%

115,000

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XYZ ATHLETIC SUPPLY, INC.
Five-Year Financial Summary (Partial; adapted)
(Dollar amounts in thousands except per share data)	2018	2017	2016	2015	2014	2016
Net sales revenue	\(275,000	\)222,000	\(199,000	\)171,000	131,000
Net Sales Revenue Increase	24%	12%	16%	31%	17%
Domestic Comparative Store Sales Increase	6%	6%	5%	8%	10%
Other Income鈥擭et	2,090	1,780	1,770	1,700	1,310
Cost of Goods Sold	208,725	169,386	154,822	134,235	103,883
Selling and Administrative Expenses	41,280	36,340	31,670	27,450	22,540
Interest:
Interest Expense	(1,070)	(1,370)	(1,330)	(1,100)	(800)
Interest Income	140	155	150	230	140
Income Tax Expense	4,420	3,900	3,610	3,390	2,730
Net Income	21,735	12,939	9,488	6,755	2,497
Per Share of Common Stock:
Net Income	1.10	0.80	0.70	0.50	0.28
Dividends	0.45	0.43	0.39	0.35	0.31
Financial Position
Current Assets, Excluding Merchandise Inventory	\(30,900	\)27,200	\(26,800	\)24,400	$21,800
Merchandise Inventory	24,700	22,400	21,600	19,300	17,000	16,800
Property, Plant, and Equipment, Net	51,600	46,200	40,500	35,000	25,200
Total Assets	107,200	95,800	88,900	78,700	64,000
Current Liabilities	32,600	27,800	28,800	25,600	17,000
Long-term Debt	23,000	21,200	16,800	18,600	12,900
Stockholders鈥� Equity	51,600	46,800	43,300	35,500	34,100
Financial Ratios
Acid-Test Ratio	0.9	1.0	0.9	1.0	1.3
Rate of Return on Total Assets	22.5%	15.5%	12.8%	10.9%	9.9%
Rate of Return on Common Stockholders鈥� Equity	44.2%	28.7%	24.1%	19.4%	18.9%

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