Question

BALANCE SHEET ANALYSIS

Complete the balance sheet and sales information using the following financial data:

Total assets turnover: 1.2x
Days sales outstanding: 39.5 days^a
Inventory turnover ratio: 4x
Fixed assets turnover: 3x
Current ratio: 2.5x
Gross profit margin on sales: (Sales - Cost of goods sold)/Sales = 25%
^aCalculation 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	50,000
Inventories			Common stock
Fixed assets			Retained earnings	60,000
Total assets	$200,000		Total liabilities and equity	$
Sales	$		Cost of goods sold	$

Answer 1

Total assets			200000
Total assets turnover = Sales / Total assets
1.2 = Sales / 200000
Sales revenue = 240000
Days sales outstanding = 365/ sales * Accounts receivable
39.5 = 365 / 240,000 *Accounts receivable
Accounts receivable = 25973
Gross Profit rate = Gross Profit / Salles *100
25% = Gross profit / 240,000 *100
Gross Profit = 60,000
Cost of goods sold = Sales - Gross profit
		240000-60000 = 180000
Inventory turnover = Cost of goods sold / Inventory
4 = 180000 / Inventory
Inventory = 45000
Fixed assets turnover = sales / fixed assets
3 = 240,000 / Fixed assets
fixed assets = 80,000
Total assets = cash+inventory+Accounts receivable + Fixed assets
200,000 = Cash + 450000+25973+ 80000
Cash = 49027
Total current assets = total assets - fixed assets
		200,000 - 80000 = 120,000
Current ratio= Current assets / current liabilities
2.5 = 120000 / Current liabilities
Current liabilities = 48000
Total assets = Total liabilities + Stockholder's equity
200000 = (48000+50000) + Stockholder's equity
Stockholder's equity = 102000
Stockholder's equity = Common stock + Retained earningss
102000 = Common stock + 60000
Common stock = 42000
Balance Sheet
Cash		49027	Current liabilities			48000
Accounts receivable		25973	long term debt			50000
Inventory		45000	Common stock			42000
Fixed assets		80000	Retained earnings			60000
Total assets		200000	Total liabilities and equity			200000
Sale		240000	Cost of goods sold			180000