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Financial Analysis of Harris Corporation

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Added on  2019-09-20

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This article provides a financial analysis of Harris Corporation including acid-test ratio, inventory turnover, days’ sale in receivables, book value per share of common stock, price-earnings ratio, rate of return on total assets, and times-interest-earned ratio for the current year.

Financial Analysis of Harris Corporation

   Added on 2019-09-20

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Student name:Course name:Instructor name:Date submitted:The following information relates to Harris Corporation.
Financial Analysis of Harris Corporation_1
AccountCurrent yearPrior yearNet sales (all credit)$520,125$499,500Cost of goods sold $375,960$353,600Gross profit $144,165$145,900Income from operations$ 95,500$ 79,900Interest expense$ 23,500$ 19,500Net income$ 57,600$ 51,600Cash $ 30,600$ 15,900Accounts receivable, net$ 33,800$ 23,200Inventory $ 42,000$ 30,300Prepaid expenses$ 2,000$ 1,500Total current assets$ 108,400$ 70,900Total long-term assets$ 62,000$ 38,000Total current liabilities$ 46,000$ 41,600Total long-term liabilities$ 20,000$ 22,700Common stock, no par, 3,000 shares, value $50/share$ 30,000$ 30,000a.What is the acid-test ratio for the current year?Solution-Acid-test ratio = (Current Assets – Inventory – Prepaid Expenses)/Current LiabilitiesAcid-test ratio = ($108,400 - $42,000 - $2,000)/$46,000Acid-test ratio = 1.40b.What is the inventory turnover for the current year?Solution-Inventory turnover = Cost of goods sold/Average InventoryInventory turnover = $375,960 / [($42,000+$30,300)/2]Inventory turnover = 10.40c.What is days’ sale in receivables for the current year?Solution-Days’ sale in receivables = Average Accounts receivable *365 / Net credit salesDays’ sale in receivables = {[($33,800+$23,200)/2]*365}/$520,125Days’ sale in receivables = 20 daysd.What is the book value per share of common stock for the current year?Solution-Book value per share of common stock = (Total asset -Total liabilities) / Number of sharesBook value per share of common stock = ($170,400-$66,000)/3,000
Financial Analysis of Harris Corporation_2

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