Compare the resulting ratios of P and P Manufacturing Company for 2018 (per your computation) with its competitors in the table given below. P and P Manufacturing CompanyComparative Statements of Financial PositionAs of 31 December 2018, 2017, and 2016In Peso2018P581, 970.00686,725.00450,470.00225,000.00845,000.00854,500.00P3.643,665.00P184,620.00350,000.003,109,045.00P3.643.665.0020162017P290,000.00340,000.00270,000.00225,000.00895,000.00825,000.00P2,845,000.00P165,000.00550,000.002,130,000.00P2,845,000.00AccountP215,000.00130,000.000.00CashAccounts ReceivableInventories350,000.00945,000.00290,000.00P1,930,000.00P200,000.00750,000.00980,000.00P1,930,000.00LandBuildings, NetEquipment, NetTotal AssetsAccounts PayableLong-term DebtCapital StockLiabilitiesTotalandShareholders' Equity Competitor C4.5:13.625:17 times5.3 times0.075:1Financial Ratios for 2018Current RatioQuick ratioReceivable TurnoverInventory TurnoverDebt RatioDebt-equity RatioTimes Interest Earned RatioGross Profit Margin RatioNet Profit Margin RatioReturn on AssetsReturn on EquityP&P Mfg. Co.9.31:16.9:118.9 times7.8 times0.15:10.17:1Competitor B6:14.25:120 times8.6 times0.2:11.75:14.5 times0.825:12.6 times3.4 times49.4%17.6%26.9%31.5%51.2%22.5%24%22%38.5%14.5%16%12%

The financial ratios are important elements of the ratio analysis. The ratio analysis helps in the…

Financial Ratios for 2018 Current Ratio Quick ratio Receivable Turnover Inventory Turnover Debt Ratio Debt-equity Ratio Times Interest Earned Ratio Gross Profit Margin Ratio Net Profit Margin Ratio Return on Assets Return on Equity Competitor C 4.5:1 3.625:1 7 times 5.3 times 0.075:1 0.825:1 2.6 times 38.5% 14.5% 16% 12% Competitor B 6:1 4.25:1 20 times 8.6 times 0.2:1 P&P Mfg. Co. 9.31:1 6.9:1 18.9 times 7.8 times 0.15:1 0.17:1 3.4 times 49.4% 17.6% 26.9% 31.5% 1.75:1 4.5 times 51.2% 22.5% 24% 22%

Financial Ratios for 2018 Current Ratio Quick ratio Receivable Turnover Inventory Turnover Debt Ratio Debt-equity Ratio Times Interest Earned Ratio Gross Profit Margin Ratio Net Profit Margin Ratio Return on Assets Return on Equity Competitor C 4.5:1 3.625:1 7 times 5.3 times 0.075:1 0.825:1 2.6 times 38.5% 14.5% 16% 12% Competitor B 6:1 4.25:1 20 times 8.6 times 0.2:1 P&P Mfg. Co. 9.31:1 6.9:1 18.9 times 7.8 times 0.15:1 0.17:1 3.4 times 49.4% 17.6% 26.9% 31.5% 1.75:1 4.5 times 51.2% 22.5% 24% 22%

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter12: Fainancial Statement Analysis

Section: Chapter Questions

Problem 81E

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