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Complete Solutions Manual for Introduction to Managerial Accounting, 9e, 9th Edition, 2024 Evergreen Release by Peter C Brewer, Ray H Garrison, Eric Noreen; ISBN13: 9781266540851....(Full Chapters are included and organized in reverse order from Chapter 14 to 1)...1. Managerial Accounting and Cost ...

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Introduction to Managerial
Accounting, 2024 Release by
Peter C Brewer



Complete Chapter Solutions Manual
are included (Ch 1 to 14)




** Immediate Download
** Swift Response
** All Chapters included
** Applying Excel Forms and Solutions
** Data Analytics Solutions

,Table of Contents are given below



1. Managerial Accounting and Cost Concepts

2. Job-Order Costing Calculating Unit Product Costs

3. Job-Order Costing Cost Flows and External Reporting

4. Activity-Based Costing

5. Process Costing

6. Cost-Volume-Profit Relationships

7. Variable Costing and Segment Reporting Tools for Management

8. Master Budgeting

9. Flexible Budgets, Standard Costs, and Variance Analysis

10. Performance Measurement in Decentralized Organizations

11. Differential Analysis The Key to Decision Making

12. Capital Budgeting Decisions

13. Statement of Cash Flows

14. Financial Statement Analysis

,Solutions Manual organized in reverse order, with the last chapter displayed first, to ensure
that all chapters are included in this document. (Complete Chapters included Ch14-1)

Chapter 14
Financial Statement Analysis

Solutions to Questions


14-1 Horizontal analysis examines how a 14-6 Financial leverage results from
particular item on a financial statement such as borrowing funds at an interest rate that differs
sales or cost of goods sold behaves over time. from the rate of return on assets acquired using
Vertical analysis involves analysis of items on an those funds. If the rate of return on the assets is
income statement or balance sheet for a single higher than the interest rate at which the funds
period. In vertical analysis of the income were borrowed, financial leverage is positive and
statement, all items are typically stated as a stockholders gain. If the return on the assets is
percentage of sales. In vertical analysis of the lower than the interest rate, financial leverage is
balance sheet, all items are typically stated as a negative and the stockholders lose.
percentage of total assets.
14-7 If the company experiences big
14-2 By looking at trends, an analyst hopes variations in net cash flows from operations,
to get some idea of whether a situation is stockholders might be pleased that the company
improving, remaining the same, or deteriorating. has no debt. In hard times, interest payments
Such analyses can provide insight into what is might be very difficult to meet.
likely to happen in the future. Rather than On the other hand, if investments within
looking at trends, an analyst may compare one the company can earn a rate of return that
company to another or to industry averages exceeds the interest rate on debt, stockholders
using common-size financial statements. would get the benefits of positive leverage if the
company took on debt.
14-3 Price-earnings ratios reflect investors’
expectations concerning future earnings. The 14-8 No. The market value of a share of
higher the price-earnings ratio, the greater the common stock often exceeds the book value per
growth in earnings investors expect. For this share. Book value represents the cumulative
reason, two companies might have the same effects on the balance sheet of past activities,
current earnings and yet have quite different evaluated using historical prices. The market
price-earnings ratios. By definition, a stock with value of the stock reflects investors’
current earnings of $4 and a price-earnings ratio expectations about the company’s future
of 20 would be selling for $80 per share. earnings. For most companies, market value
exceeds book value because investors anticipate
14-4 A rapidly growing tech company would future earnings growth.
probably have many opportunities to make
investments at a rate of return higher than 14-9 A 2 to 1 current ratio might not be
stockholders could earn in other investments. It adequate for several reasons. First, the
would be better for the company to invest in composition of the current assets may be
such opportunities than to pay out dividends heavily weighted toward slow-turning and
and thus one would expect the company to have difficult-to-liquidate inventory, or the inventory
a low dividend payout ratio. may contain large amounts of obsolete goods.
Second, the receivables may be low quality,
14-5 The dividend yield is the dividend per including large amounts of accounts that may be
share divided by the market price per share. The difficult to collect.
other source of return on an investment in stock
is increases in market value.


Solutions Manual, Chapter 14 1

, The Foundational 15

1. The earnings per share is computed as follows:
Net income
Earnings per share =
Average number of common
shares outstanding
$92,400
= = $0.77 per share
120,000 shares*

* $120,000 ÷ $1 par value per share = 120,000 shares

2. The price-earnings ratio is computed as follows:
Market price per share
Price-earnings ratio =
Earnings per share
$2.75
= = 3.57 (rounded)
$0.77

3. The dividend payout ratio is computed as follows:
Dividends per share
Dividend payout ratio =
Earnings per share
$0.55
= = 71% (rounded)
$0.77

The dividend yield ratio is computed as follows:
Dividends per share
Dividend yield ratio =
Market price per share
$0.55
= = 20%
$2.75




2 Introduction to Managerial Accounting, 10th Edition

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