Question

Refer to Exhibits A and B below to answer the questions that follow. Exhibit A Jordan Corporation Balance Sheet September 30, 2015 Assets Current Assets (in dollars) Cash: 500,000 Accounts receivable: 600,000 Inventory: 950,000 Prepaid expenses: 50,000 Total Current Assets:2,100,000 Property, Plant and Equipment (in dollars) Land: 250,000 Buildings, net of depreciation: 300,000 Equipment, net of depreciation: 800,000 Total Property, Plant and Equipment: 1,350,000 Total Assets: 3,450,000 Liabilities (in dollars) Current Liabilities Accounts payable: 700,000 Wages payable: 200,000 Interest payable: 25,000 Total Current Liabilities: 925,000 Long Term Liabilities Notes Payable: 500,000 Bonds Payable: 450,000 Long Term Liabilities: 950,000 Total Liabilities: 1,875,000 Shareholders' Equity (in dollars) Common stock: 500,000 Additional paid in capital: 100,000 Retained earnings: 975,000 Total Shareholder equity: 1,575,000 Total Liabilities and Equity: 3,450,000 Exhibit B Jordan Corporation Statement of Operations Year Ended September 30, 2015 All figures in dollars Sales: 6,000,000 Cost of goods sold: 3,600,000 Gross margin: 2,400,000 Selling and administrative expenses: 1,950,000 Operating income: 450,000 Interest expense: 50,000 Income before taxes: 400,000 Income taxes: 100,000 Net income: 300,000 Classify each of the above below as a liquidity, asset management, financial leverage or profitability measure. Quick (Acid Test) ratio Current ratio Accounts payable period Collection period Inventory turnover Total debt to total assets Interest coverage Operating income margin Net income margin Return on assets Return on equity

Answer 1