Question

BALANCE SHEET ANALYSIS Complete the balance sheet and sales information using the following financial data: Total assets turnover: 1.8x Days sales outstanding: 30 days Inventory turnover ratio: 7x Fixed assets turnover: 3.5x Current ratio: 2.1x Gross profit margin on sales: (Sales Cost of goods sold)/Sales 20 % Calculation is based on a 365-day year. Do not round intermediate calculations. Round your answer to the nearest cent. Balance Sheet Cash Current liabilities $ Accounts receivable Long-term debt 41,250 Inventories Common stock Fixed assets Retained earnings 96,250 Total assets $275,000 Total liabilities and equity Sales Cost of goods sold

Answer 1

Find the explanation below :

Balance Sheet
Cash	$     36,315.07		Current Liabilities	$ 63,605.44
Accounts Receivables	$     40,684.93		Long Term Debt	$ 41,250.00
Inventories	$     56,571.43		Common Stocks	$ 73,894.56
Fixed Assets	$ 1,41,428.57		retained Earning	$ 96,250.00
Total Assets	$       2,75,000		Total Liabilities and Equity	$   2,75,000
Sales	$       4,95,000		Cost of Good Sold	$   3,96,000

Total Asset Turnover : 1.8x

Total Asset Turnover = Net Sales /Average Total Assets

Total Asset Turnover	1.8x	=	Net Sales /Average Total Assets
	1.8	=	Net Sales / 275,000
	1.8*275000	=	Net Sales
	Net Sales	=	$                                              4,95,000

Gross Profit Margin = (Sales - COGS) / Sales = 20%

Gross Profit Margin = (495,000 - COGS) / 495,000 = 20%

COGS = $ 396,000

Inventory Turnover Ratio = 7x

Inventory Turnover Ratio = COGS / Average Inventory

7x = 396,000 / Average Inventory

Average Inventory = 396,000 / 7 = 56,571.429

Days Sales Outstanding = 30 Days

Days Sales Outstanding = Accounts Receivables / Average Sales per Day

30 = Accounts Receivables / (495,000/365)

30 = Accounts Receivables / 1,356.16

Accounts Receivables = 30 * 1,356.16 = 40,684.93

Fixed Assets Turnover = 3.5x

Fixed Assets Turnover = Net Sales / Fixed Assets Net of Depreciation

3.5 = 495,000 / Fixed Assets

Fixed Assets = 495,000/3.5

Fixed Assets = 141,428.57

Cash = Total Assets - (Accounts Receivables+ Inventories+ Fixed Assets)

Cash = 275,000 - (141,428.57 + 56,571.43 + 40,684.93)

Cash = 36,315.07

Current Ratio = 2.1

Current Ratio = Current Assets / Current Liabilities

2.1 = (Cash + Accounts Receivable + Inventories) / Current Liabilities

2.1 = 133,571.43 / Current Liabilities

Current Liabilities = 133,571.43 / 2.1 = 63,605.44

Common Stock = Total Liabilities and Equity - Retained Earnings - Long Term Debt - Current Liabilities

Common Stock = 73,894.56

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