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# Financial Analysis of Harris Corporation

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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.
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Student name:Course name:Instructor name:Date submitted:The following information relates to Harris Corporation.
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

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