Robust Robots, Inc. | |||||||
Comparative Balance Sheet- Horizontal Analysis | |||||||
December 31, 2019 and 2018 | |||||||
Assets | 2019 | 2018 | Differents | Percentage | |||
Current Assets: | |||||||
Cash | $65,000 | $80,000 | $ (15,000.00) | -18.75% | |||
Accounts Receivable, net | $150,000 | $100,000 | $ 50,000.00 | 50.00% | |||
Merchandise Inventory | $135,000 | $70,000 | $ 65,000.00 | 92.86% | |||
Supplies | $9,700 | $500 | $ 9,200.00 | 1840.00% | |||
Prepaid Insurance | $30,000 | $10,000 | $ 20,000.00 | 200.00% | |||
Total Current Assets | $389,700 | $260,500 | $ 129,200.00 | 49.60% | |||
Property, Plant, and Equipment: | |||||||
Equipment | $500,000 | $240,000 | $ 260,000.00 | 108.33% | |||
Less: Accumulated Depreciation - Equipment | ($80,000) | ($90,000) | $ 10,000.00 | -11.11% | |||
Total Property, Plant, and Equipment | $420,000 | $150,000 | $ 270,000.00 | 180.00% | |||
Total Assets | $809,700 | $410,500 | $ 399,200.00 | 97.25% | |||
Liabilities and Stockholders’ Equity | 2019 | 2018 | |||||
Current Liabilities: | |||||||
Accounts Payable | $150,000 | $40,000 | $ 110,000.00 | 275.00% | |||
Unearned Revenue | $40,000 | $50,000 | $ (10,000.00) | -20.00% | |||
Salaries Payable | $40,000 | $30,000 | $ 10,000.00 | 33.33% | |||
Federal Income Taxes Payable | $10,000 | $10,000 | $ - | 0.00% | |||
Total Current Liabilities | $240,000 | $130,000 | $ 110,000.00 | 84.62% | |||
Long Term Liabilities | |||||||
Note Payable | $130,000 | - | $ 130,000.00 | 0.00% | |||
Total Long-Term Liabilities | $130,000 | - | $ 130,000.00 | 0.00% | |||
Total Liabilities | $370,000 | $130,000 | $ 240,000.00 | 184.60% | |||
Stockholders’ Equity: | |||||||
Common Stock, $10 Par | $170,000 | $100,000 | $ 70,000.00 | 70.00% | |||
Paid-In Capital in Excess of Par | $43,700 | $ - | $ 43,700.00 | ||||
Retained Earnings | $226,000 | $180,500 | $ 45,500.00 | 25.20% | |||
Total Stockholders’ Equity | $439,700 | $280,500 | $ 159,200.00 | 56.80% | |||
Total Liabilities and Stockholders’ Equity | $809,700 | $410,500 | $ 399,200.00 | 97.20% |
Robust Robots, Inc. | ||||||||||
Comparative Statement of Income -Vertical analysis | ||||||||||
For the Years Ended December 31, 2019 and 2018 | ||||||||||
2019 | % | 2018 | % | |||||||
Sales | $700,000 | 100% | $600,000 | 100% | ||||||
Cost of Goods Sold | $524,300 | 74.90% | $420,000 | -70.00% | ||||||
Gross Margin | $175,700 | 25.10% | $180,000 | 30% | ||||||
Operating Expenses: | ||||||||||
Salaries and Wages Expense | $47,290 | 6.76% | $100,000 | -16.67% | ||||||
Rent Expense | $20,256 | 2.89% | $20,000 | -3.33% | ||||||
Depreciation Expense | $20,000 | 2.86% | $10,000 | -1.67% | ||||||
Total Operating Expenses | $87,546 | 12.51% | $130,000 | 21.67% | ||||||
Income from Operations | $88,154 | 12.59% | $50,000 | 8.33% | ||||||
Loss on Sale of Equipment | ($5,213) | -0.74% | - | |||||||
Interest Expense | ($3,656) | -0.52% | ($5,000) | -0.83% | ||||||
Increase (Decrease) in Operating Income | ($8,869) | -1.27% | ($5,000) | -0.83% | ||||||
Income before Taxes | $79,285 | 11.33% | $45,000 | 7.50% | ||||||
Federal Income Taxes | $23,786 | -3.40% | $13,500 | -2.25% | ||||||
Net Income | $55,500 | 7.93% | $31,500 | 5.25% |
Working Capital both years | $149,700 | |
Current Ratio both years | 1.62 | |
Quick ratio both years | 1.06 | |
Account Receivable Turnovers | 5.60 | |
Number of Days Sales in Receivables | 65 | |
Inventory Turnover | 5.12 | |
Number of Days Sales in Inventory | 71 | |
2019 | 2018 | |
Ratio of Liabilities to Stck Equidy | 0.84 | 0.46 |
Return on Total Assets 2019 | $0.08 | |
Return on StockHolders Equidy | $0.15 | |
2019 | 2018 | |
Earnings Per Share | $0.33 |
Acting as an accounting advisor to the firm, prepare a memo in which you analyze the financial statements you prepared and along with the ratios that you have calculated prepare an analysis of the company’s financial position. Identify two weaknesses in the company. Make two recommendations to improve the company’s financial position. Be specific in each of the recommendations and use the ratios to support your analysis.
The weaknesses in the operation of Robust Robots, Inc.: |
a)50% rise in Receivables since 2018 and high 65 days receivables are maintained. |
b) 90% rise in inventories since 2018 and heavy 71 days inventory is maintained. |
c) Many times rise in Supplies since 2018 |
d) Highly leveraged company as Liability/Equity ratio is 0.84. Assets financed through long term debt instead of equity. |
e) Reduction of the gross margin by 5%, which should be maintained at constant. |
Recommendations to improve financial position: |
a) Improve the collection and reduce the credit period. |
b) Reduce the inventories and maintain tight control on inventory. |
c) Replace debt with the equity to reduce the interest expense and reduce leverage. |
d) improve the selling price of the product in the ratio of rise in direct costs to maintain gross margin. |
Robust Robots, Inc. Comparative Balance Sheet- Horizontal Analysis December 31, 2019 and 2018 Assets 2019 2018...
Robust Robots, Inc. Comparative Balance Sheet- Horizontal Analysis December 31, 2019 and 2018 Assets 2019 2018 Differents Percentage Current Assets: Cash $65,000 $80,000 $ (15,000.00) -18.75% Accounts Receivable, net $150,000 $100,000 $ 50,000.00 50.00% Merchandise Inventory $135,000 $70,000 $ 65,000.00 92.86% Supplies $9,700 $500 $ 9,200.00 1840.00% Prepaid Insurance $30,000 $10,000 $ 20,000.00 200.00% Total Current Assets $389,700 $260,500 $ 129,200.00 49.60% Property, Plant, and Equipment: Equipment $500,000 $240,000 $ 260,000.00 108.33% Less: Accumulated Depreciation - Equipment ($80,000) ($90,000) $ ...
Shown below, is a Comparative Balance sheet using Horizontal analysis, please prepare an Income statement using vertical Analysis Robust Robots, Inc. Comparative Balance Sheet- Horizontal Analysis December 31, 2019 and 2018 Assets 2019 2018 Differents Percentage Current Assets: Cash $65,000 $80,000 $ (15,000.00) -18.75% Accounts Receivable, net $150,000 $100,000 $ 50,000.00 50.00% Merchandise Inventory $135,000 $70,000 $ 65,000.00 92.86% Supplies $9,700 $500 $ 9,200.00 1840.00% Prepaid Insurance $30,000 $10,000 $ 20,000.00 200.00% Total Current Assets $389,700 $260,500 $ 129,200.00 49.60%...
Prepare a Cash Flow Statement. Robust Robots, Inc. Comparative Balance Sheet December 31, 2019 and 2018 2018 2019 $ Assets Current Assets: Cash Accounts Receivable, net Merchandise Inventory Supplies Prepaid Insurance Total Current Assets 65,000 150,000 135,000 9,700 30,000 389,700 $ $ $ $ $ $ 80,000 100,000 70,000 500 10,000 260,500 $ Property, plant, and Equipment: Equipment Less: Accumulated Depreciation - Equipment Total Property, Plant, and Equipment Total Assets $ $ $ $ 500,000 (80,000) 420,000 809,700 $ $...
Prepare a Cash Flow statement using indirect method Robust Robots, Inc. Comparative Balance Sheet December 31, 2019 and 2018 Assets 2019 2018 Current Assets: Cash Accounts Receivable, net Merchandise Inventory Supplies Prepaid Insurance Total Current Assets $ $ $ $ $ 65,000 150,000 135,000 9,700 30,000 389,700 $ $ $ $ $ $ 80,000 100,000 70,000 500 10,000 260,500 Property, Plant, and Equipment: Equipment Less: Accumulated Depreciation - Equipment Total Property, Plant, and Equipment Total Assets 500,000 (80,000) 420,000 809,700...
Using horizontal analysis, perpare a Comparative Balance Sheet. Robust Robots, Inc. Comparative Balance Sheet December 31, 2019 and 2018 2019 2018 Assets Current Assets: Cash Accounts Receivable, net Merchandise Inventory Supplies Prepaid Insurance Total Current Assets $ $ $ $ $ $ 65,000 150,000 135,000 9,700 30,000 389,700 $ $ $ $ $ $ 80,000 100,000 70,000 500 10,000 260,500 Property, Plant, and Equipment: Equipment Less: Accumulated Depreciation - Equipment Total Property, plant, and Equipment Total Assets $ $ $...
Using vertical analysis, prepare and Income Satement. (this is all the infomation) (indirect method) Robust Robots, Inc. Comparative Balance Sheet December 31, 2019 and 2018 2019 2018 Assets Current Assets: Cash Accounts Receivable, net Merchandise Inventory Supplies Prepaid Insurance Total Current Assets $ $ $ $ $ $ 65,000 150,000 135,000 9,700 30,000 389,700 $ $ $ $ $ $ 80,000 100,000 70,000 500 10,000 260,500 Property, Plant, and Equipment: Equipment Less: Accumulated Depreciation - Equipment Total Property, plant, and...
Prepare a statement of Cash Flow for the current year using the indirect method Robust Robots, Inc. Comparative Balance Sheet December 31, 2019 and 2018 2019 2018 Assets Current Assets: Cash Accounts Receivable, net Merchandise Inventory Supplies Prepaid Insurance Total Current Assets $ $ $ $ $ $ 65,000 150,000 135,000 9,700 30,000 389,700 $ $ $ $ $ $ 80,000 100,000 70,000 500 10,000 260,500 Property, Plant, and Equipment: Equipment Less: Accumulated Depreciation - Equipment Total Property, plant, and...
Prepare a Satement of Cash Flow for the current year usinf the indirect method. Robust Robots, Inc. Comparative Balance Sheet December 31, 2019 and 2018 2019 2018 Assets Current Assets: Cash Accounts Receivable, net Merchandise Inventory Supplies Prepaid Insurance Total Current Assets $ $ $ $ $ $ 65,000 150,000 135,000 9,700 30,000 389,700 $ $ $ $ $ $ 80,000 100,000 70,000 500 10,000 260,500 Property, Plant, and Equipment: Equipment Less: Accumulated Depreciation - Equipment Total Property, plant, and...
Prepare a Statement of Cash Flow for the current year using the indirect method Robust Robots, Inc. Comparative Balance Sheet December 31, 2019 and 2018 2019 2018 Assets Current Assets: Cash Accounts Receivable, net Merchandise Inventory Supplies Prepaid Insurance Total Current Assets $ $ $ $ $ $ 65,000 150,000 135,000 9,700 30,000 389,700 $ $ $ $ $ $ 80,000 100,000 70,000 500 10,000 260,500 Property, Plant, and Equipment: Equipment Less: Accumulated Depreciation - Equipment Total Property, plant, and...
Using horizontal analysis, prepare a Comparative Balance Sheet. thats all the information i was given Robust Robots, Inc. Comparative Balance Sheet December 31, 2019 and 2018 2019 2018 Assets Current Assets: Cash Accounts Receivable, net Merchandise Inventory Supplies Prepaid Insurance Total Current Assets $ $ $ $ $ $ 65,000 150,000 135,000 9,700 30,000 389,700 $ $ $ $ $ $ 80,000 100,000 70,000 500 10,000 260,500 Property, Plant, and Equipment: Equipment Less: Accumulated Depreciation - Equipment Total Property, plant,...