Accounting Problems

"Required "a ) 1 "Return on Investment based on NET INCOME (Perform a Du Pont Analysis (Profit Margin (Total Assets Turnover "0 .944 "0 .9676 "0 .5878 "2 "Return on Equity "0 .6443 "3 "Price Earning Ratio "23 .55 "4 "Dividend Yield "0 .97531 "5 "Dividend Payout Ratio "0 .2529 "B ) 1 "Working Capital "9766 "2 "Current Ratio "2 .377 "3 "Acid Test Ratio "11577 "1 .412 "C )1 "No of days sales in Account Receivable "34 .54 "Days "2 "No of days sales in Inventory "79 .04 "Days "3 "Account Receivable Turn Over (in times "10 .61 "Times "4 "Inventory

Turn Over (in times "4 .366 "Times "5 "Turn over of net Property ,Plant Equipment "0 .4807 "D ) 1 "Debt Ratio "0 .6226 "2 "Debt /Eqity Ratio "0 .7653 "3 "Times Interest Earned "No Interest Expense is given in the question so it is not feasible to calculate times interest earned "E ) 1 "Net Revenues per Employee "0 .7024 "in Millions "2 "Operating Income per Employee "0 .53666 "in Millions "94100 "Required "a "According to me , in the Gerrard Construction Co dissert Statement of Cash Flow and Statement of changes in Equity is missing .The Statement of Cash Flow which is the integral part of financial statement gives us true reflection of cash with respect to Operating ,Investing and Financing Activities Statement of changes shows us about the dividend payment ,Reserves ,company 's retention with respect to retained earning and how much shares is issued "b "A .The reason to separate Depreciation expense from operating expense is that the depreciation expense is non-cash expenses , because they reduce net income but do not consume cash . Second , changes to operating (current ) balance sheet accounts are added or subtracted From conceptual point of view depreciation is considered as a cost .Theoratically , this is a good measure of operating profit . By including depreciation and ammortization , EBIT counts the cost of making long-term investments . However , we should trust EBIT only if depreciation expense (also called accounting or book depreciation ) approximates the company 's actual cost to maintain and replace its long-term assets (Economic depreciation is the term used to describe the actual cost of maintaining longterm assets "B .Depreciation is high because Gerrad is a construction company so there is a huge capital expenditure or we interpert it in such a manner that the company is in defensive position so they have spent money on acquiring fixed assets which is why depreciation expense is high . And on the other side the company 's capital structure might be designed in a position where co is highly dependent on debt financing in to run the business so high debt financing reflects high interest expense .For depreciation expense we relate with the fixed assets side of the balace sheet while for the interest expense we monitor short /long term debt accounts in the balance sheet "C . Average income tax is 30 .47 "D .Amount of Income tax expense is different from the amount of Income tax payable...