INCOME STATEMENT | ||
(Figures in $ millions) | ||
Net sales | 185.00 | |
Cost of goods sold | 145.00 | |
Selling, general and admin expenses | 13.00 | |
Depreciation | 23.00 | |
Earnings Before Interest & Taxes (EBIT) | 4.00 | |
Interest expenses | 0.50 | |
Earnings Before Taxes (EBT) | 3.50 | |
Tax at 35% (On EBT) | 1.23 | |
Net Income | 2.28 | |
BALANCE SHEET | ||
(Figures in $ millions) | ||
This year | Last year | |
Assets | ||
Cash and marketable securities | 39.00 | 23.00 |
Accounts receivables | 26.00 | 37.00 |
Inventories | 19.50 | 29.00 |
Total current assets | 84.50 | 89.00 |
Net property, plant & equipment | 50.50 | 28.00 |
Total Assets | 135.00 | 117.00 |
Liabilities & shareholders equity | ||
Accounts payable | 30.00 | 25.00 |
Notes payable | 35.00 | 40.00 |
Total current liabilities | 65.00 | 65.00 |
Long term Debt | 54.00 | 23.00 |
Shareholders' equity | 16.00 | 29.00 |
Total Liabilities & shareholders equity | 135.00 | 117.00 |
Workings:
1) Inventory turnover ratio = Cost of goods sold/ Average inventory
5 = Cost of goods sold/ 29
Cost of goods sold = 29 * 5
= 145
2) Current ratio = Current assets/ Current liabilities
1.3 = Current assets/ 65
Current assets = 65 * 1.3
= 84.5
3) Net property, plant & equipment = Total assets – current assets
= 135 - 84.5
= 50.5
4) Quick Ratio = Current assets – inventories / Current liabilities
1 = 84.5 – inventories / 65
65 = 84.5 – inventories
Inventories = 84.5 – 65
= 19.5
5) Long term Debt ratio = Long term Debt / Total assets
0.4 = Long term Debt / 135
Long term Debt = 135 * 0.4
= 54
6) Shareholders equity = Total Liabilities & shareholders equity - Total current liabilities - Long term Debt
= 135 – 65 – 54
= 16
7) Cash ratio = Cash and marketable securities / current liabilities
0.6 = Cash and marketable securities / 65
Cash and marketable securities = 65 * 0.6
= 39
8) Accounts receivables = Total current assets – Inventories - Cash and marketable securities
= 84.5 – 19.5 – 39
= 26
9) Average collection period = Accounts receivables / Net sales * 365
73 = 37 / Net sales * 365
Net sales = 37 * 365 / 73
= 185
10) Interst earned ratio = Earnings Before Interest & Taxes (EBIT) / Interest expenses
8 = 4 / Interest expenses
Interest expenses = 4 / 8
= 0.5
Note: Inventory and Accounts receivable for last year IS Taken for calculating ratios rather than average ( Answer varry when average is taken )
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