In: Accounting
BUS-FP4061 - Managerial Accounting Principles | ||||||||||||||||
Assessment 10: Ratio Analysis Worksheet | ||||||||||||||||
Problem 1 | ||||||||||||||||
Solve the given problem based on the following scenario. | ||||||||||||||||
Megacorp's balance sheet and income statement, including all credit sales, are given in the table below. | ||||||||||||||||
As of December 31, 2012: | ||||||||||||||||
· | Inventories were $46,500. | |||||||||||||||
· | Total assets were $178,500. | |||||||||||||||
· | Common stock was $90,000. | |||||||||||||||
· | Retained earnings were $20,600. | |||||||||||||||
Megacorp Income Statement (December 31, 2013) | ||||||||||||||||
Sales | $ 349,500 | |||||||||||||||
Cost of goods sold | 238,250 | |||||||||||||||
Gross profit | 111,250 | |||||||||||||||
Operating expenses | 51,250 | |||||||||||||||
Interest expenses | 4,000 | |||||||||||||||
Income before taxes | 56,000 | |||||||||||||||
Taxes (at 30%) | 16,800 | |||||||||||||||
Net income | $ 39,200 | |||||||||||||||
Megacorp Balance Sheet (December 31, 2013) | ||||||||||||||||
Assets | Amount ($) | Liability and Equity | Amount ($) | |||||||||||||
Cash | 10,000 | Accounts payable | 17,000 | |||||||||||||
Short-term investment | 7,500 | Accrued wages payable | 2,500 | |||||||||||||
Accounts receivable | 28,000 | Income taxes payable | 3,000 | |||||||||||||
Notes receivable | 3,500 | Notes payable (long-term) | 64,500 | |||||||||||||
Inventory | 31,150 | Common stock | 90,000 | |||||||||||||
Prepaid expenses | 1,650 | Retained earnings | 59,800 | |||||||||||||
Plant | 155,000 | |||||||||||||||
Total assets | 236,800 | Total liability and equity | 236,800 | |||||||||||||
Compute the following and show your work. | ||||||||||||||||
Ratio | Calculation | |||||||||||||||
Current ratio | ||||||||||||||||
Days' sales uncollected | ||||||||||||||||
Days' sales in inventory | ||||||||||||||||
Times interest earned | ||||||||||||||||
Total asset turnover | ||||||||||||||||
Return on common stockholders' equity | ||||||||||||||||
Acid-test ratio | ||||||||||||||||
Inventory turnover | ||||||||||||||||
Debt-to-equity ratio | ||||||||||||||||
Profit margin ratio | ||||||||||||||||
Return on total assets | ||||||||||||||||