Question

Success Systems SP 17 Use the following selected data from Success Systems' income statement for the three months ended March 31, 2008, and from its March 31, 2008, balance sheet to complete the requirements below: computer services revenue, $31,850; net (goods) sales, $20,345; total sales and revenue, $52.195; cost. of goods sold, $14,272; net income, $24,336; quick assets, $111,666; current assets, $116,371; total as- sets, $147,621; current liabilities, $1,050; total liabilities, $1,050; and total equity, $146,571. 714 Chapter 17 Analysis of Financial Statements Required I. Compute the gross margin ratio (both with and without services revenue) and net profit margin ratio. 2. Compute the current ratio and acid-iest ratio. 3. Compute the debt ratio and equity ratio. 4. What percent of its assets are current? What percent are long term?

Answer 1

1		With service revenue	Without service revenue
	Net sales (of goods)	20,345	20,345
	Computer Service Revenue	31,850
	Total sales and revenue	52,195	20,345
	Cost of goods sold	14,272	14,272
	Gross margin	37,923	6,073
	Gross Profit Margin Ratio	72.66%	29.85%
	Net income	24,336
	Net profit margin ratio	46.63%
2	Current ratio =	111
	(Current Assets/Current Liabilties)
	Acid-test ratio =	106
	(Quick assets/Current Liabilities)
3	Debt ratio =	0.71%
	(Total Libilities/Total Assets)
	Equity ratio =	99.29%
	(Total Equity/Total Assets)
4	Current assets are 78.83% of total assets (116371/147,621)
	Long-term assets are 21.17% of total assets (31,250/147,621)