26 Jan 6. Sales to Fixed Assets 2010
Problem 7-2
Jones Petro Company reports the following consolidated statements of income:
Operating Revenues $2,989
Costs and Expenses:
Cost of rentals and royalties 543
Cost of sales 314
Selling, service, administrative, and general expense 1,424
Total costs and expenses 2,281
Operating Income 708
Other Income 27
Other income (interest) __60
Income before income taxes 675
Income taxes _ 309
Income before outside shareholder’s interest 366
Outside shareholders interest 66
Net Income $300
Required:
a.) Compute the times interest earned
b.) Compute the fixed charge coverage.
Problem 8-5
a. How did 2011 net sales compare with 2010?
b. How did 2011 net earnings compare with 2010?
c. Calculate the following for 2011 and 2010.
Net profit margin 2011
Net profit margin 2010
Total asset turnover 2011
Total asset turnover 2010
Return on assets 2011
Return on assets 2010
DuPont Analysis 2011
DuPont Analysis 2010
Operating Income Margin 2011
Operating Income Margin 2010
Return on Operating Assets 2011
Return on Operating Assets 2010
Operating Asset Turnover 2011
Operating Asset Turnover 2012
DuPont Analysis with Operating Ratios 2011
DuPont Analysis with Operating Ratios 2010
1. 2010 2011
Net earnings before minority
Share $149,260 $149,760
Interest Expense 18,768 11,522
Earnings before tax 263,762 271,500
Provision before income tax 114,502 121,740
Tax rate 43.4% 44.8%
1 – Tax rate 56.6% 55.2%
(Interest expense) x (1- tax rate) 10,623 6,360
Net earnings before minority
Share
Long-term debt + equity 159,883 156,120
Return on investment 1,019,420 933,232
15.7% 16.7%
Return on equity 2011
Return on equity 2010
d. Based on the previous computations, summarize the trend in profitability for this firm.
The assets and sales have declined. Profitability ratios have declined while the absolute profits show a steady increase.
Case 8-5
1. Net Profit Margin 2010
Net Profit Margin 2009
2. Total Asset Turnover 2010
Total Asset Turnover 2009
3. Return on Assets 2010
Return on Assets 2009
4. Operating Income Margin 2010
Operating Income Margin 2009
5. Return on Operating Assets 2010
Return on Operating Assets 2009
6. Sales to Fixed Assets 2010
Sales to Fixed Assets 2009
7. Return on Total Equity 2010
Return on Total Equity 2009
8. Gross Profit Margin 2010
Gross Profit Margin 2009
b. Comment on the trends in a.
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