Question

“ Fill in the yellow and missing bars with formula”

RATION Nawth Data Seth Global Technology Comparative Sale For Year Ended December 31, 2012 and 2011 2550 000 $127.500 $123.000 81.6601 3500 Nashes Cost of manchandises Gross peo Sellingen General Totalt expenses Operating i n Other expenses interest Income before income tax Income tax Net income 36.000 19.500 164,4001 220.905 Global Technology Comparative R e aning Statement For Years Ended December 31, 2012 and 2011 Rati ng ! Netice for you Teo Come dividende Retained carings, December 31 Global Technology Comparative Balance Sheet For Years Ended December 31, 2012 and 2011 $34 830 232.500 Cash Accounts receivable Merchandising Prepaid expenses Planet Towns 5617000 298 575 637 500 25.500 150 000 22.500 l 1 $325 400 350.000 $331 195.000 Schade Ache Bonds a nd 2030 Total Commons Retained camnings Total wockholders' equity Twalib a kholders' equity Answers 0 5600300 Liquidity ratio Acid-test (quick) ratio Current ratio Account Profitability Gross profita Net income to sales cared on comme Contactos quity Tim e s earned

Answer 1

Global Technology

Comparative Income statement

For years Ended December 2012 and 2011

Particulars 2012($) 2011($)

(1)Net Sales     3,516,075 3,300,330

(2)Cost of merchandise sold 2,820,000 2,550,000

(3) Gross Profit [1-2] 696,075 750,330

(4) Selling Expenses 123,000 127,500

(5) General Expenses 81,660 88,500

(6) Total Operating Expenses[4+5] 204,660   216,000

(7) Operating Income [3-6] 491,415 534,330

(8) Other expenses(Interest) 36,000 19,500

(9) Income before Income tax 455,415 514,830

(10) Income Tax 164,400 220,905

(11) Net Income 291,015 293,925

Global Technology

Comparative Retained Earnings statement

For years Ended December 2012 and 2011

Particulars 2012($) 2011($)

(1) Retained Earnings, Jan 1 1,420,095 1,186,170

(2) Net Income for the year 291,015 293,925

(3) Total [1+2] 1,711,110 1,480,095

(4) Common Stock dividends 82,500 60,000

(5) Retained Earnings, December 31[3-4] 1,628,610 1,420,095

Global Technology

Comparative Balance Sheet

For years Ended December 2012 and 2011

ASSETS 2012($) 2011($)

Cash 34,830 63,000

Accounts receivables 232,500 298,575

Merchandise Inventory 825,480 637,500

Prepaid Expenses 22,500 25,500

Plant assets (net) 1,800,000 1,530,000

Total Assets (A) 2,915,310 2,554,575

Liabilities & Stockholder's Equity 2012($) 2011($)

Accounts Payable 326,400 339,180

Bonds Payable, 10% due 2020 360,000 195,000

Total Liabilities 686,400 534,180

Common stock 600,300 600,300

Retained Earnings   1,628,610 1,420,095

Total Shareholder's Equity   2,228,910 2,020,395

Total Liabilities (B) 2,915,310 2,554,575

Calculation of Ratios for the year 2012:-

(1) Quick ratio = (Cash + Marketable securities + Receivables) / Current liabilities

= (34,830 + 232,500) / 326,400

= 0.82

(2) Current ratio = Current assets / Current Liabilities

= (34,830 + 232,500 + 825,480 + 22,500) / 326,400

= 3.42

(3) Accounts receivable turnover = Net Credit Sales / Average Accounts Receivable

Avg Accounts receivable = 232500 + 298575 / 2 = 265,538 (rounded off)

Accounts receivable turnover = 3,516,075 / 265,538 = 13.24

(4) Inventory turnover = Cost of goods sold / Average inventory

Avg Inventory = 825,480 + 637,500 / 2 = 731,490

Inventory turnover = 2,820,000 / 731,490 = 3.86

(5) Gross profit ratio = gross profit / net sales

= 696,075 / 3,516,075

= 0.20

(6) Net income to sales = Net income / net sales

= 291,015 / 3,516,075

= 0.083

(7) Rate earned on Total Assets = EBIT / Average total Assets

Average total assets = 2,915,310 + 2,554,575 / 2 = 2,734,943 (rounded off)

Rate earned on Total Assets = 491,415 / 2,734,943 = 0.18

(8) Rate earned on common stock equity = Net income - Preferred dividend / Average common stock holder's equity

Average common stock holder's equity = 2,228,910 + 2,020,395 / 2 = 2,124,653 (rounded off)

Rate earned on common stock equity = 291,015 / 2,124,653 = 0.14

(9) Debt to Total assets = Total Liabilities / Total assets

= 686,400 / 2,915,310

= 0.24

(10) Times Interest earned = EBIT / Interest expense

= 491,415 / 36,000

= 13.65