Use the information from the Income Statement and Balance Sheet to construct the ratios and answer...
Use the information from the Income Statement and Balance Sheet to construct the ratios and answer the questions below. Downloadable Financial statements HW 4 SXP 19.docxPreview the document hw3 ratios.jpg
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Barry Computers Income statement DEC 31, 2016 |
|||
|
Sales |
1,607,500 |
||
|
GOGS |
1,392,500 |
||
|
Gross Profit |
215,000 |
||
|
SG&A |
145,000 |
||
|
EBIT |
70,000 |
||
|
Interest Expenses |
24,500 |
||
|
EBT |
45,500 |
||
|
TX (40%) |
18,200 |
||
|
NI |
27,300 |
||
|
Barry Computers Balance Sheet DEC 31, 2016 |
|||
|
Cash |
77,500 |
Accounts Payable |
129,000 |
|
Accounts receivables |
336,000 |
Accruals |
117,000 |
|
Inventory |
241,500 |
Notes Payable |
84,000 |
|
Total current Assets |
655,000 |
Total Current Liabilities |
330,000 |
|
Long-term Debt |
256,500 |
||
|
Net Fixed Assets |
292,500 |
Common Equity |
361,000 |
|
Total assets |
947,500 |
Total Liabilities & Equity |
947,500 |
Group of answer choices
Current ratio
quick Ratio
Days of sales Outstanding
Inventory Turnover ratio
Days of sales in inventory
Total Asset Turnover
Fixed Asset Turnover
Return on Assets
Return on Equity
Return on Invested Capital
Times Earned Interest
Debt to Capital
Debt Ratio
Equity Ratio
Profit Margin
Homework Answers
| Current ratio = Current assets/Current liabilities = 655000/330000 = | 1.98 |
| Quick Ratio = (Cash+Receivables)/Current liabilities = (77500+336000)/330000 = | 1.25 |
| Days of sales Outstanding = Receivables*365/Sales = 336000*365/1607500 = | 76.29 |
| Inventory Turnover ratio = Cost of goods sold/Inventory = 1392500/241500 = | 5.77 |
| Days of sales in inventory = 365/Inventory turnover = 365/5.77 = | 63.30 |
| Total Asset Turnover = Sales/Total assets = 1607500/947500 = | 1.70 |
| Fixed Asset Turnover = Sales/Net fixed assets = 1607500/292500 = | 5.50 |
| Return on Assets = NI/Total assets = 27300/947500 = | 2.88% |
| Return on Equity = NI/Common equity = 27300/361000 = | 7.56% |
| Return on Invested Capital = NOPAT/Total net operating assets = 70000*(1-40%)/(947500-246000) = | 5.99% |
| Times Earned Interest = EBIT/Interest expense = 70000/24500 = | 2.86 |
| Debt to Capital = Debt(Interest bearing)/(Debt-interest bearing+Equity) = (84000+256500)/(340500+361000) = | 48.54% |
| Debt Ratio = Debt/Total assets = (330000+256500)/947500 = | 61.90% |
| Equity Ratio = EquityTotal assets = 361000/947500 = | 38.10% |
| Profit Margin = NI/Sales = 27300/1607500 = | 1.70% |
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to show calculations for the 14 ratios listed on page 141, as well
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averages.
Write a short memo to your
supervisor explaining your findings and your recommendations for
improvement.
Suggest some ways in which the
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industry averages. After that, write a brief summary as to what
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