Homework SourseProblems 1 and 2 BALANCE SHEET 2015 INSTRUCTIONS Analyze the
| Problems 1 and 2 | |||||||
| BALANCE SHEET | 2015 | INSTRUCTIONS: Analyze the firm\'s performance from both time-series and cross-sectional points of view using the key financial ratios provided. PROVIDE YOUR WRITTEN ANALYSIS IN THIS COLUMN. | |||||
| Assets | |||||||
| Cash and Equivalents | $237,500.00 | ||||||
| Accounts Receivable | $592,500.00 | ||||||
| Inventory | $607,500.00 | ||||||
| Total Current Assets | $1,437,500.00 | ||||||
| Gross Fixed Assets | $1,250,000.00 | ||||||
| Less Accumulated Depreciation | $187,500.00 | ||||||
| Net Fixed Assets | $1,062,000.00 | ||||||
| Total Assets | $2,500,000.00 | ||||||
| Liabilities and Equity | |||||||
| Current Liabilities | |||||||
| Accounts Payable | $222,500.00 | ||||||
| Notes Payable | $422,500.00 | ||||||
| Accruals | $217,500.00 | ||||||
| Total Current Liabilities | $862,500.00 | ||||||
| Long Term Debt | $470,000.00 | ||||||
| Total Liabilities | $1,332,500.00 | ||||||
| Stockholder\'s Equity | |||||||
| Common Stock | $637,500.00 | ||||||
| Retained Earnings | $530,000.00 | ||||||
| Total Stockholders Equity | $1,167,500.00 | ||||||
| Total Liabilities & Equity | $2,500,000.00 | ||||||
| INCOME STATEMENT | |||||||
| Sales Revenue | $3,360,000.00 | ||||||
| Cost of Sales | $2,724,960.00 | ||||||
| Gross Profits | $635,040.00 | ||||||
| Less: Operating Expenses | |||||||
| Selling Expense | $251,200.00 | ||||||
| General S&A | $163,200.00 | ||||||
| Depreciation | $48,000.00 | ||||||
| Total Operating Expenses | $462,400.00 | ||||||
| Total Operating Profit | $172,640.00 | ||||||
| Less: Interest Expense | $31,200.00 | ||||||
| Net Profits Before Taxes | $141,440.00 | ||||||
| Less Taxes (40%) | $56,576.00 | ||||||
| Net Profits After Taxes | $84,864.00 | ||||||
| LIQUIDITY RATIOS | 2013 | 2014 | 2015 | Industry Average | |||
| Current Ratio | 1.5 | 1.7 | ? | 1.6 | |||
| Quick Ratio | 0.9 | 1 | ? | 0.9 | |||
| Operating Cash Flow | n/a | n/a | |||||
| ASSET MANAGEMENT RATIOS | 2013 | 2014 | 2015 | Industry Average | |||
| Inventory Turnover | 6 | 5 | ? | 8.4 | |||
| Average Collection Period | 40 | 50 | ? | 40 | |||
| Fixed Asset Turnover | n/a | n/a | |||||
| Total Asset Turnover | 1.5 | 1.5 | ? | 1.75 | |||
| DEBT MANAGEMENT RATIOS | 2013 | 2014 | 2015 | Industry Average | |||
| Debt Ratio | 60% | 56% | 50% | ||||
| Times Interest Earned | 2.5 | 3.5 | 4 | ||||
| PROFITABILITY RATIOS | 2013 | 2014 | 2015 | Industry Average | |||
| Gross Profit Margin | 20% | 19.70% | ? | 20% | |||
| Operating Profit Margin | 4.70% | 4.80% | ? | 6% | |||
| Net Profit Margin | 2% | 2.30% | ? | 3% | |||
| Return on Investment | 3.00% | 3.50% | ? | 5.25% | |||
| Return on Equity | 7.50% | 7.95% | ? | 10.50% | |||
| End of worksheet |
| Problems 1 and 2 | |||||||
| BALANCE SHEET | 2015 | INSTRUCTIONS: Analyze the firm\'s performance from both time-series and cross-sectional points of view using the key financial ratios provided. PROVIDE YOUR WRITTEN ANALYSIS IN THIS COLUMN. | |||||
| Assets | |||||||
| Cash and Equivalents | $237,500.00 | ||||||
| Accounts Receivable | $592,500.00 | ||||||
| Inventory | $607,500.00 | ||||||
| Total Current Assets | $1,437,500.00 | ||||||
| Gross Fixed Assets | $1,250,000.00 | ||||||
| Less Accumulated Depreciation | $187,500.00 | ||||||
| Net Fixed Assets | $1,062,000.00 | ||||||
| Total Assets | $2,500,000.00 | ||||||
| Liabilities and Equity | |||||||
| Current Liabilities | |||||||
| Accounts Payable | $222,500.00 | ||||||
| Notes Payable | $422,500.00 | ||||||
| Accruals | $217,500.00 | ||||||
| Total Current Liabilities | $862,500.00 | ||||||
| Long Term Debt | $470,000.00 | ||||||
| Total Liabilities | $1,332,500.00 | ||||||
| Stockholder\'s Equity | |||||||
| Common Stock | $637,500.00 | ||||||
| Retained Earnings | $530,000.00 | ||||||
| Total Stockholders Equity | $1,167,500.00 | ||||||
| Total Liabilities & Equity | $2,500,000.00 | ||||||
| INCOME STATEMENT | |||||||
| Sales Revenue | $3,360,000.00 | ||||||
| Cost of Sales | $2,724,960.00 | ||||||
| Gross Profits | $635,040.00 | ||||||
| Less: Operating Expenses | |||||||
| Selling Expense | $251,200.00 | ||||||
| General S&A | $163,200.00 | ||||||
| Depreciation | $48,000.00 | ||||||
| Total Operating Expenses | $462,400.00 | ||||||
| Total Operating Profit | $172,640.00 | ||||||
| Less: Interest Expense | $31,200.00 | ||||||
| Net Profits Before Taxes | $141,440.00 | ||||||
| Less Taxes (40%) | $56,576.00 | ||||||
| Net Profits After Taxes | $84,864.00 | ||||||
| LIQUIDITY RATIOS | 2013 | 2014 | 2015 | Industry Average | |||
| Current Ratio | 1.5 | 1.7 | ? | 1.6 | |||
| Quick Ratio | 0.9 | 1 | ? | 0.9 | |||
| Operating Cash Flow | n/a | n/a | |||||
| ASSET MANAGEMENT RATIOS | 2013 | 2014 | 2015 | Industry Average | |||
| Inventory Turnover | 6 | 5 | ? | 8.4 | |||
| Average Collection Period | 40 | 50 | ? | 40 | |||
| Fixed Asset Turnover | n/a | n/a | |||||
| Total Asset Turnover | 1.5 | 1.5 | ? | 1.75 | |||
| DEBT MANAGEMENT RATIOS | 2013 | 2014 | 2015 | Industry Average | |||
| Debt Ratio | 60% | 56% | 50% | ||||
| Times Interest Earned | 2.5 | 3.5 | 4 | ||||
| PROFITABILITY RATIOS | 2013 | 2014 | 2015 | Industry Average | |||
| Gross Profit Margin | 20% | 19.70% | ? | 20% | |||
| Operating Profit Margin | 4.70% | 4.80% | ? | 6% | |||
| Net Profit Margin | 2% | 2.30% | ? | 3% | |||
| Return on Investment | 3.00% | 3.50% | ? | 5.25% | |||
| Return on Equity | 7.50% | 7.95% | ? | 10.50% | |||
| End of worksheet |
Solution
5.13
2.5
| Particulars | 2015 |
| Current ratio | 1.67 |
| Quick ratio | 0.96 |
| Inventory turnover | 5.53 |
| Average collection period | 64.3 |
| Total assets turnover | 1.34 |
| Debt ratio | 53.3 |
| Times interest earned | 5.5 |
| Gross margin percentage | 18.9 |
| Operating profit margin | 5.13 |
| Net profit margin | 2.5 |
| Return on investment | 3.39 |
| Return on equity | 7.57 |
